The $1.9B Transit Plan in New Jersey Is Changing Where You Should Buy

In recent episodes, we've taken a deep dive into Governor Sherrill's Executive Order 17 aimed at increasing affordability for buyers here in the Garden State. We've also taken a look at the office conversion bill, S-1766, that's targeting some spaces that are already in existence for commercial purposes and repurposing them to become more of a residential space to meet the need of housing units for a demand that is high relative to very low inventory. Today, we're looking at the third piece of that puzzle, and it might be the biggest one. NJ Transit itself is sitting on 8,000 acres, and they just announced exactly how they're going to develop it. Today, we map out exactly where this hits and what it means if you are buying, selling, or investing near a train station. Welcome to New Jersey Living. My name is Corey Jones, and I'm a licensed real estate agent here in New Jersey. In my role, I help hundreds of people just like you buy, sell, and in some cases, rent real estate here in the Garden State. As I mentioned in the lead-in, we have been talking about some of these measures and initiatives aimed at increasing home ownership opportunities and really addressing the need for our shortage in available housing here in New Jersey. Part of that has been Executive Order 17, which is looking for agencies to come together and figure out ways to move forward to create more of these housing units, not an immediate answer, but something that's going to create more of a procedural process to ease the ability to remove some of that red tape to get to a place where we can actually have some development. Executive Order 1766 is aiming at converting office spaces. In some cases, it's retail spaces as well. Converting these underutilized spaces into residential spaces. With these measures, there's also some controversy because in some cases, they are removing the ability of municipalities to control that process. Today, we're going to touch specifically on what NJ Transit is doing that is unfolding right now as we speak today. As we see right here on our first slide in today's episode, we are seeing that there's a $1.9 billion plan to develop land that is in direct proximity to NJ Transit train stations. We're going to hit on four of these locations where that is really underway right now. This plan alone will not address the full scope of shortage of housing. The estimates of shortage in New Jersey reach up to about 400,000. 200,000 alone for affordable housing units. We're looking at 8,000 acres statewide when we're talking about this NJ Transit land alone. The NJ Transit proposal is addressing not only land development, you're talking about 50,000 jobs, 20,000 housing units, 4,000 of that being affordable. 4,000 of that 20,000, if you just do the quick math, you'll see very quickly, we're talking 20%, which is consistent with what we were talking about in previous episode on the bill, the 1766 bill aimed at office conversion. So consistent with what's going to be allocated for affordable. And it's not a hypothetical thing here. You have the CEO, President and CEO of NJ Transit, Chris Collori, hope I'm pronouncing that correctly. These are proposed actions. And we see some of that unfolding already in Red Bank. We're going to pay close attention to in this episode. Important note with this particular NJ Transit plan, municipalities are still very much at the table. This is not a dynamic where municipalities are going to have some of these zoning overrides. That's going to be a component of the legislation that is currently still being discussed. It's not rolled out, not passed yet, but being discussed in Trenton. And as you can see with the land plan, really an acronym, Leveraging Assets for Non-Fairbox Dollars. And this is something that is, as we see up here as well, put into place October of last year. Here we are now, June of 26. And we see that activity well underway. The process, what does it look like for any of these sites to actually undergo some kind of transformation? Right here, you can see what it looks like to go from parking lot to a proposal. It's a bit inverted here because you see one being green as something completed, five being a perspective where it truly begins. So one really in this case is the finish line. Underneath you see there are three pathways to this. You can see these acronyms. A couple of these have acronyms. RFQ slash P, that's the most common path. It's a competitive open public request for qualification proposals, qualifications and proposals, public notice. This is used for sites likely requiring the assembly of multiple parcels. And then there is the URD, unsolicited request for development. And investor can just make a direct pitch at a site that is not already publicly listed. All right. So these are kind of those three pathways, but whichever pathway is chosen, this is what the pipeline looks like. It's a perspective. And you can see where certain sites are right now, right underneath this. So number five, perspective. This is Princeton Junction and it is Secaucus Junction. These are two major, major hubs for NJ Transit. Secaucus, if you're familiar with that area, there's already apartments, luxury apartments that are in the general vicinity. But you know as well if you're in that area, there's a lot of still open land generally in that space. And some of these are parking lots. Okay. So that along with Princeton Junction in the perspective phase. Metro Park, there is active solicitation now. Now, Metro Park, there is absolutely work and we'll show a little bit right here. All right. So I'm going to be on site for that. And I'll jump in for that just in a minute. But that is already, there's already activity on a former parking lot. It's not a parking lot anymore, right? It's a building there. But when active solicitation, it definitely means that there is more to come for that location. Pre-development. Pre-development, again, site selection and you have agreements that are put in motion under construction. That's where we're going to talk about today a little bit more in depth is Red Bank. All right. Phase one underway and completed would be Somerville. Somerville Station built and occupied. So that is smaller in scale because Somerville is a smaller train station. It's not a major hub like these others, but it's an example of something that is already completed a project in that framework of what we're talking about with this pipeline. In business, we have what is called proof of concept. So as it pertains to this particular pipeline plan from parking to an actual living space, this is an example of Somerville, right? So we have Somerville that's showing us right now an example of this. So let's take a quick look. We'll take a look at the visual. All right. So what you see right here, this is something that is in existence right now in Somerville. This was a project that probably completed within the past, I'd say maybe three years because I remember specifically someone, a client of mine looking at one of the townhomes that was available for purchase. So you have Avalon that's there as well, which you can see a portion of that in the photo, which Avalon is going to be rentals. Those are luxury rental apartments, but there's also townhomes that are being sold in all of this in a plaza that is directly adjacent to the train station. Flashing up the article, you can see right here, this is goes back to August of last year, but they're talking about another phase. So there's a final phase of 171 apartments in a park that is still underway. But the units, you can see the total units, 530. All right. That includes rental apartments, townhomes, and live to work units, 4,000 square feet of retail space, a civic building where you have council and other meetings are held, co-working office space and public spaces. So all of this is really that outcome that we can point to to say, what does this look like when it is a plan that's just not proposed and under construction, but actually is in place, we have an outcome. So that would be Somerville. So let's go back and see what we're looking at in terms of what the outcome was there the day in 2019, as you can see on the slide here, was parking today, it is now mixed use. So a total of an $11 million price tag for the land transition 503 units and open space reserves is talking about 17 acres of spaces still is reserved as open space. Now, the rendering we see right here on this slide, this is not Somerville, this is representing Red Bank. So we're, we're going to see something very similar that unfolded in Somerville at Red Bank. So what is happening where it is happening, right? So we can see right here, we have the map of the primary locations that are identified, we see the points on the map, we have Red Bank is closer to the shore, we have Princeton Junction, which again, as I referred to before, one of the major transit hubs, if you will, for NJ Transit, we have Metro Park, another major one, this is more what I consider Central Jersey, this is in Woodbridge, but you know, people in the surrounding communities of Woodbridge and Edison, those two communities primarily, but even some that are a little more adjacent to that, you know, some people from a touching and railway could opt there, even though they have their own train stations. But if you need to express train, I know, and I am not too far away from this location, you would consider Metro Park if you really need that super fast express to get into the city. So that is another one. And then we have Secaucus, right? Secaucus Junction, which is the one further north and just west of Manhattan. So Red Bank under construction, as we noted, Metro Park, there's active solicitation. But again, there is development happening right now. I know that's parking lot. My question is whether that was part of this specific plan, but that is very much under construction on that location. And the prospective phases are both Princeton Junction, as well as Secaucus. And here you can see another Red Bank rendering, right? So this is another rendering giving you an idea of conceptually what they're envisioning for Red Bank as it's already under construction. And we're probably not too far out from seeing something that is really observable, right? That is a finished, closer to a finished product in the next probably 12 months or so. So before we touch on some of these other smaller sites, just some quick notes that I wanted to, I felt warranted to mention in this. So for Red Bank specifically, the target is 175 apartments, 20% of them being affordable. All right. There'll be 15,000 plus square feet on the ground floor, which is typically retail and pedestrian access improvement. So that typically means walkways. I don't know if that really is going to translate into like a bridge of some kind or yeah, something that's really, truly kind of fancy, how you may have some of these access points that you can take to get over a road. I don't think that's necessary for Red Bank specifically, but nonetheless, pedestrian access improvements is part of that. For Middlesex Metro Park, 12 acres, right? So this is 12 acres next to one of the busiest train stations in the state. Yeah, it's noted that it's the fifth busiest station statewide and noted here. And this is where maybe what I am seeing right now with the current construction that is happening there and why that's not considered part of this phase, but there is existing parking garages would likely be replaced. Because keep in mind, this is still a proposal phase right here. For Princeton, 40 acres, roughly 40 acres. So this is the largest single site of all the locations in the entire portfolio. So from an investor standpoint, for those that are interested and has been paying attention in general to Central Jersey, this is going to be one of the largest real estate developments in that region of the state in over a decade. For Secaucus, that is roughly 27 acres of what is definitely a central hub. This is a lot of trains are going to connect and a lot of transfers occur also at Secaucus leading into the city. This is definitely the highest leverage site just because of the proximity to the city. So the upside of the development is significant because there is relatively little space and area to do much in areas that close to the city. So our smaller sites that are worth watching, this is where it comes more into play with smaller investors. You don't have to be necessarily institutional with some of these massive projects that we mentioned before, but these are smaller stations, smaller amounts of land, but developers who are maybe not the huge institutional player, but still can take on a few million worth of investment prospect. We have Pennsauk in transit. Obviously they took looking at Camden County in that area, Trenton Transit Center, Riverside Station, and Netherwood, which would be in Plainfield. An important note here that NJ Transit has an interactive TOD map. So look up, see what is happening close to you right there in your neighborhood or that train station that you most often use. So buyer, seller, investor, what does this mean to you? So we have this slide here. We're looking at your angle. What are the look fors, what to be aware of just in a general sense. So buyers, this is something that arrives with built-in affordability mandate. So 20% at Red Bank. So you'll have one inventory availability already presents opportunity because the supply is so tight right now. So this is not always renter specific either when we're talking about affordability. Affordability does in fact apply to ownership. So I mentioned before, commonly in Hudson County, definitely in Jersey City, you find that there are affordable units that can be purchased and they are designated specifically for incomes. So whether it be an individual or a household. So that unit or that property is going to fit within a certain parameter. It is not going to be a situation where it's going to be a part of your investment portfolio because they do come with restrictions. So when you live there, there's only so much equity that you're going to be entitled to once you sell and move on. So that's something to keep in mind unless that property, that deed restriction is removed. That's a different case in that scenario, but nonetheless, you're going to have certain restrictions. But the important thing is, is that you do have the opportunity one to own and to build a certain amount of equity. So this is something that should be on the radar. If you are someone who is inclined to be close to a transit center and open for this kind of opportunity buyer, you want to pay attention. So for sellers, if something is happening in your area, I know on one side, I hear it a lot, is these are going to be added people, added vehicles, added traffic, added, you name it. This is coming to the area when they put up these new developments. It's going to happen. But what also happens is there tends to be an elevation of property value in the area. All right. Because keep in mind, there's a lot of infrastructure that takes place. We talked about like that public access, right? So the pedestrian access enhancements that are coming along with that development. So whether they be plazas or green spaces or retail or road work or bridge or something that adds to the general aesthetic and general feasibility of getting around, that tends to happen with these developments. So as a seller, you are likely observing an increase of your property value. So while we're there, going to also throw out that pitch for sellers and I'll get to you buyers right after this, but for homeowners specifically, know your value. All right. So you always want to know your value. This QR code right here, click that. We will get you a custom market analysis that's specific to your property in your neighborhood. And we can get that to you within 48 hours, no strings attached, no obligations. For sellers who are just curious, what would an investor offer me like right now? That offer is not going to be market value. Know that it's typically cash. It's going to be quick. It's going to be convenient, but it's not necessarily market price. Use this QR code. I can get you a number from my investor network and it can be just something you file away or something you want to explore. But again, no strings attached. For buyers, this QR code is for you. You have one for a buyer playbook. Again, that playbook is specific to you. It's specific to you, your budget, your location, your timeframe. Utilize this for cases where you don't already have an agent that you're working with. Allow them to do that for you if you do already have an agent. But if you're looking either right now or somewhere in the near future, definitely use this for a resource. And another buyer resource for those who are coming into the area from outside of the region or outside of the country, this QR code is for you to get a few more additional insights about the Garden State. And so for investors, especially for these small site situations, consider the URD pathway. So the URD, that is unsolicited. So you are basically bringing to a municipality and you're bringing to NJ Transit like, hey, look, I know you didn't put this out there, but in my area, especially if it's one of these areas, obviously those four major ones, just forget about it. But for smaller sites or you are near a location where you may want to consider, you know what, I think it's worthwhile. I don't think I should even hesitate to put something in front of New Jersey Transit to make a pitch directly to them to say, hey, look, this is what I can do. If that's something that interests you, definitely let me know. We can have a conversation about that locality and we can have a conversation as well about what that pitch would look like to take before NJ Transit and even have some conversation with some municipal officials about that project. So it's something that needs to be framed out, something that needs to be thoughtfully planned. And you need to obviously bring some resources to bear such as engineering and what have you in terms of what you're looking to do. But this is definitely something that should be catching your radar as an investor. If you know of certain areas that you'd like to explore, knowing that NJ Transit is going this direction, why not consider me to be part of that plan? So we always have the what ifs. So here, this is about just a reality check of what could slow this down. We have federal funding headwinds. The proposed Build America 250 Act, again, is proposed. But if that does, in fact, gain enough traction to pass legislation, we're looking at both funding for general transit funding by 15% and new transit project funding by 45%. Alright, so that is a risk to the overall broader plan for NJ Transit may not necessarily defund the land plan. Because again, that's already in place. But this is something just to keep on radar that could impact how this fully rolls out. Secondly, a home rule, it cuts both ways. So we talked about mandates and things of that nature, really being overwritten by Bill 1766. This is not a part of that, remember. So this is something where your municipalities still very much are in place here and zoning and different types of restrictions and approvals still is a part of that process. And that could translate into things really stretching out in terms of time and projects being reshaped in a very significant way by the time they reach a point of approval. So with the land, you know, the transportation development and land, you know, projects that we're talking about right here, the land plan, yes, that that could take some different shifts in terms once it gets through municipal hands. But that's always part of the process as we know it anyway. And finally, legislative processes still underway that are still pending. So your transit on parcel parcels near stations that are areas in need of development, that is a designation that is required with legislative action. So that is something that's still in process, not a done deal. So when addressing this shortfall of inventory and this affordability issue in the state of New Jersey, there's two plans and they're all have the same goal, right? Both I say all because I'm still considering Executive Order 17 as well. But these are separate from Executive Order 17. The Bill 1766 and the land plan are both aiming to bring more options and affordable options to the general public that's going to be closer in proximity to train stations for the land plan specifically 1766 is not specific, of course, to transit that's more so existing office spaces and sometimes office and retail spaces. But the good news ultimately is that there are three plans that are in motion to address that big issue in the room is these prices that we are paying right now are high. They are high because of simple supply and demand, right? There are just more people that are still searching to buy property that is available. And people who are on property right now sitting on property that they don't do not want to sell and as many reasons why they don't sometimes it could be a matter of capital gains. Sometimes it's just that they're not ready to transition quite yet. Sometimes they're looking at that attractive interest rate that they refinance, you know, four or five years ago, right at two or 3%. And do not want to trade that in for a higher interest rate to buy something else somewhere else. So it it varies. But the reality is, is that the aim of all of three, these three actions is to bring more opportunity and more prospects within the marketplace to allow people to get into a home that they can afford. So I want to thank you for joining for another episode, please do click subscribe, click the notification bell, make a comment. We want you to be a part of this community as we continue to explore and investigate New Jersey real estate and keep you informed of what is happening in the marketplace in general and specific to your neighborhoods because we are as I've been promising going to be having more neighborhood and local footage that is coming up. And I want to also remind you if you haven't seen some of those episodes where we addressed the state law 1766 or the executive order 17 do check my channel to check those out as well. And in reference to today's content, do you have a train station in your town? Are you close to one? All right, go ahead and look that up. Look up the information as to what's happening locally investors. Again, if you see something that you think may be worthy of a shot, reach out to me. I'd love to have a conversation with you. So I wanted to thank everyone again for joining New Jersey living. So I always say, stay safe and stay tuned to New Jersey living.