Even as an increasing number of home sales head to the settlement
table, the luxury-rental market in the eight-county Philadelphia region grows
stronger and more sustainable.
The latest example, Rivergate, is rising on eight-plus acres of
industrial land in Burlington County, along Bordentown's Delaware River
waterfront - one piece of the estimated $300 million, 98-acre rehabilitation of
what was, until the early 1980s, the site of North American Ship Salvage Co.
Rivergate is a 159-unit, four-building luxury-rental venture developed
by Sterling Properties of Livingston, N.J., which builds for-sale and rental
housing and owns and manages apartment communities in New Jersey, Pennsylvania,
New York, and Connecticut.
Sterling partnered with developer Jeffrey Albert of Princewood
Properties and Bordentown Waterfront Development L.L.C. to build the first of
the multiphase redevelopment project, said Wayne Zuckerman, who, with Steven
Katz, is a co-principal of Sterling.
"We initially became interested in the property about six or seven
years ago," about the time Albert came up with the redevelopment plan,
Zuckerman said, noting that approvals for his piece took five years. In May,
Sterling secured a $23 million construction loan from Commercial Mortgage
Capital.
Once completed, Rivergate will have elevator access, private parking,
an outdoor swimming pool, and a clubhouse with a state-of-the-art fitness
center, Zuckerman said.
A retail component will encompass 25,000 square feet, he said. There is
a contract with a convenience food store, which Zuckerman declined to identify,
for a substantial part of the retail space, and they are also seeking a
pharmacy because renters are expected to be a mix of young professionals and
empty nesters.
"There is a fairly decent shopping center a mile from the property
with a supermarket," he said.
When Sterling builds anything, Zuckerman said, "we ask ourselves,
'How far do you have to go for a quart of milk?' "
Overall, the waterfront project is envisioned as a transit-oriented
village of 600 apartments, townhouses, and affordable units anchored by the
Bordentown station of NJ Transit's River Line, which runs from Camden to
Trenton. When completed, the complex will have shops, restaurants, multiple
recreation areas, hiking and biking trails, and a boardwalk, giving township
residents access to Bordentown's riverfront for the first time in more than a
century, officials said.
Also planned are $11 million in state-funded improvements to the nearby
intersection of Route 130 and Burlington-Bordentown Road.
Though Sterling's piece of the project is at so early a stage he cannot
definitively identify the prospective tenant pool, Zuckerman expects some to be
commuters not only to Trenton but to Center City, just 45 minutes away, and New
York City, an hour and 10 minutes away.
"There also will be local residents, especially seniors, moving
there, since elevator access is offered in all the buildings," he said.
Like many luxury-rental developers, Zuckerman is confident this segment
of the market will continue to grow and sustain apartment construction.
"Homeownership for these people is not the way it was 10 years
ago, although people do want the lifestyle," he said.
In a study that developer David Della Porta provided to secure
permanent financing for his new Malvern rentals, Eastside Flats, he said the
change in attitude about homeownership would drive rental demand.
"With the likelihood of policy at all levels being less targeted
to homeownership, the increase in the renting pool for all age groups will be
substantial," Della Porta said.
In its third-quarter 2013 metro area report, real estate investment
services firm Marcus & Millichap said completions of rentals will rise,
after several years of limited construction.
Market conditions are encouraging developers, but vacancy rates will be
4.9 percent "as steady demand growth will surpass additions to rental
stock," the report said.
Source: Philly.com
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