Northern New Jersey Multifamily Market Report
Hudson County, NJ By the Numbers
- Vacancy Rate: 5.2%
- Rent Growth: 2.1%
- Sales Volume: $615M
- Transactions: 131
Q3 2024 | Past 12-Months | 6-Units and Greater | Source: CoStar Group
Vacancies
Hudson County’s apartment vacancy rate reflects two extremes. Buildings closest to the waterfront are nearly as full as those just across the river in Manhattan, where vacancy rates are among the lowest of all major metro areas nationally. The most challenging area for finding unoccupied units is the area from Colgate Center to Newport, where the vacancy rate is just 3.8% in Q3 2024. Hoboken has a slightly higher vacancy rate at 4.1%, but with fewer overall units available, it remains difficult for tenants to find open apartments in this submarket.
Rent
Hudson County saw overall rent growth of 2.0% for the annual period ending in Q3 2024, with the market once again showing a divide between its eastern and western regions. In Hoboken and the Jersey City Waterfront, rents grew by 3.0% and 2.8%, respectively, on an annual basis, while other parts of the county recorded more modest growth of around 1.0%. As availability along the waterfront continues to decline and rental rates exceed $4,000 per month, demand spillover is expected to reignite rent growth in Journal Square and The Heights over the next 12 to 18 months, as tenants are nudged toward these more affordable areas.
Northern New Jersey Multifamily Construction
Developers are active across all of Hudson County’s submarkets, but new supply pressure is limited in Hoboken and northern parts of the county. Hoboken and North Hudson County are likely to see rents rising over the next 12 months, as demand remains strong and construction activity is minimal. While the Jersey City Waterfront is a hotspot for development on a per-unit basis, many new units are concentrated in two projects set for completion after 2026.
This limited supply in the most desirable waterfront areas will likely apply upward pressure on rental rates and further compress vacancy rates over the next few years. The Jersey City/Journal Square submarket is experiencing the most construction, with 4,400 units currently in the pipeline. Though vacancy in this area is already higher than the county average, the increasing difficulty of securing waterfront units should drive spillover demand, helping to absorb many of the newly built apartments.
Sales | $1 Million to $50 Million
In the year ending Q3 2024, Hudson County recorded $615 million in sales volume, $202 million of this velocity came from the $1 million-$50 million price tranche. Over the last 12 months, the average occupancy of traded buildings has been on the rise across the county, highlighting the flight to quality for buyers in the market. The North Hudson County submarket recorded substantial deal flow in this price tranche, particularly buildings with 6-50 units. Additionally, private investors are active in the Journal Square area, where individual deal sizes typically range from $1 million to $20 million per building. In Q3 2024 specifically, Journal Square attracted the most attention from active investors, a trend likely to accelerate as interest rates decline between now and spring 2025.
Per-unit pricing in the $1 million to $50 million range has fallen roughly 15% from the 2021 peak, reaching $217,000 per unit in 3Q 2024. Cap rates on these deals are typically in the mid-to-high 5% span, but this has been rising since interest rates climbed in 2022. Hudson County remains a great option for investors looking to take advantage of NYC’s large workforce and low vacancy rates at lower entry costs than investors are across the Hudson River.
