JERSEY CITY, NJ—Margules Properties has purchased five mixed use buildings in Jersey City where the NYC based investment firm owns and manages more than one million square feet of development rights in the city's Journal Square neighborhood.

Margules Properties plans to upgrade the buildings and make them more appealing to new retail and millennials looking for convenient and reasonably priced rentals near the PATH train. “We have a very positive view of the future of Jersey City,” says Margules Properties CEO Eric Margules. “We are looking forward to being part of the revitalization of a dynamic area.”

“We bought our first building in October 2010, so we've been there about five years,” Margules tells GlobeSt.com exclusively. “Manhattan prices were just so high, and Brooklyn was starting to take off. We just saw that the transportation was really great there and there was every reason to think that it was going to be a great place for people to go, and it's proven correct, of course.”

Margules says his firm owns some land ready for building, but most of his holdings are existing buildings being renovated and renting “quickly,” and he does describe himself as “a long-term holder” of properties.

“We don't have any immediate plans to change anything, we'll just let them brew and let the market continue to rise, and operate the buildings as they are,” he says.

Two of the buildings form a triangle bound by Montgomery Avenue, Orchard Street and Jordan Avenue, in the McGinley Square section of Jersey City. They include a gut-renovated, five-story walk-up building at 52 Orchard Street, with 12 apartments and three stores and 685 Montgomery Avenue, a three-story mixed-use building with three stores and five apartments.

“I've witnessed a lot of areas that have grown quite a bit,” Margules says, noting that he has been an early buyer in Hell's Kitchen, the Lower East Side, and Chelsea in New York, and in the South Beach section of Miami. “I think that there is lots of room for growth in Jersey City, and we are not in a rush to change anything.”

The other buildings include:  70 Tonnele Avenue, a 17-unit apartment building; 142 Monticello Ave., a corner three-story townhouse building with 2,500 sq. ft. of retail space on the first floor and two, two-bedroom units on the two upper floors and 2175 J.F. Kennedy Boulevard, a one-story vacant commercial building.

According to Margules, the McGinley Square area recently was up-zoned with similar zoning to Journal Square. Directly across Montgomery Avenue, a developer has recently received approval to construct a 21-story, 595 unit apartment building.  Directly across Orchard Street, a different developer has announced plans to build a 200,000 square foot building.  

“The city has proposed closing Orchard Street right where our building is located and designating it a pedestrian walkway,” says Margules, who pointed out that about 300 feet away is a large armory building which is underutilized at this time, but is anticipated to be a venue for art fairs and parties, just like NYC armories.

“This neighborhood is on the cusp of revitalization” says Margules. “We believe this area will begin to attract the arts community and younger people that want to be close to Manhattan and want good size apartments for reasonable rates”

Earlier this year, Margules Properties purchased the Sip Building, 48-58 Sip Ave. in Jersey City, for $2.5 million, or $500 per square foot. The 5,000-square-foot, single-story, freestanding storefront property sits on a quarter-acre in the Hudson waterfront submarket of Northern New Jersey near several new residential and commercial developments in Jersey City.  It features four retail stores and has significant air rights above the triangle-shaped building. Margules also owns the adjacent 60-64 Sip Ave., a 64-unit multifamily building with eight retail stores on the ground floor, which it purchased in October 2012 for $9.18 million. Combined, the two buildings offer 280 feet of frontage.

“We are looking to buy more properties to further build our presence in Jersey City,"  says Margules, adding that he also expects to continue increasing the firm's holdings in Manhattan, Queens and Brooklyn where it owns more than 70  buildings. 

“The number of buildings we own there will continue to increase,” he says. “We are actively looking in Queens and Brooklyn and will continue to expand our presence there as well. Both boroughs still offer large apartments in close proximity to transportation into the city at reasonable rates.”