This article was originally published in the April 2017 Princeton Echo.
At a time when some real estate agents are forecasting a soft market for rental units in town, the leasing office for Avalon Princeton is surprisingly upbeat. After a contentious approval process featuring a citizen group lawsuit, Avalon Princeton began moving tenants last August into its large-scale complex occupying the former Princeton Hospital site at the corner of Witherspoon Street and Franklin Avenue. All 280 dwelling units are scheduled for completion this year. Of those completed more than 50 percent are occupied or leased.
“We are where we expected to be at this time in terms of both leasing velocity and the pricing of the leases,” says Ron Ladell, senior vice president, speaking from his office in Woodbridge.
Last May when the first units were just coming online, Avalon Princeton released floor plans with monthly rent for studios starting at $2,213, one-bedroom apartments from $2,655, and two-bedroom apartments from $3,235. The three-bedroom units and townhomes had not yet been priced.
Now, nearly a year later the website indicates that the same model studios are starting at $1,780, one-bedrooms from $1,865, and two-bedrooms from $2,795 — substantial reductions. Fees for common area/amenities ($500), parking ($125 a month), pets ($500 initial fee plus $55 per pet per month — limit of two), and storage ($35 to $150 per month), remained unchanged. The three-bedroom, two-bath apartments range from $4,180 to $5,040 per month. Two-bedroom townhouses with a first floor garage start at $5,795 and the three-bedroom counterparts start at $6,890 a month. (One-fifth of the total units in the development, or 56 units, are set aside by the developer as affordable units.)
Aren’t these substantial reductions? Ladell cautions against reading too much into the variations. In fact, he says, prices on apartments in the AvalonBay communities (some 285 complexes nationwide with 85,000 apartments) can go up and down weekly. The reason: a sophisticated revenue management system that the New York Stock Exchange-listed company uses to continuously update its pricing depending on customer interest and existing and expected vacancies.
Ladell compares it to an airline booking system, where passengers sitting next to each other who bought tickets at different times may have paid noticeably different fares. If you are searching for a one-bedroom apartment and Avalon’s records show that it will have only three such units coming open in the next month, it will charge one rate. If the record shows nine units coming open in the same time frame, the rate may be lower.
The overall goal for a large-scale landlord like Avalon is not 100 percent occupancy, Ladell says. By the rules of the revenue management system, that would mean that the pricing was not aggressive enough.
While Avalon Princeton may not be the ideal barometer of the Princeton rental market, calls to real estate brokers in town suggest that — at least for the time being — supply does indeed seem to exceed demand for high end apartment units.
Real estate broker Martha Stockton of Stockton Realty, who manages more than 90 apartments in town, says apartments in Princeton go quickly when there is parking, laundry, and “decent rent for the space.”
But, she adds, the inventory has grown. Princeton University has built a lot of new housing recently — at the Stanworth tract on the site of the old Merwick rehabilitation center and in the Lakeside project on Faculty Road. Faculty and students can get better deals and more flexible leases than can be offered by commercial rental offerings. And even Stanworth might be overbuilt for the time being — word on the street is that the university is considering opening up the rentals to the general public.
Another relative newcomer to the luxury apartment market is the 153-unitCopperwood on Bunn Drive, located beyond the Princeton Shopping Center and beyond normal walking distance to town. It began as an age-restricted community, but now is open to all (55-plus people have priority). It currently has two dozen or so vacancies.
Another new apartment building, coming on the market this month at 255 Nassau Street, will add more units — 23 two and three-bedroom apartments — to the supply pool. Known as the Residences at Carnevale Plaza, the two-bedroom, two-bath apartments start at $2,943 per month. Three-bedroom, two-bath apartments start at $3,977 per month. These apartments are priced within a few hundred dollars of Avalon, but the Carnevale project boasts a Nassau Street location and proximity to a dozen restaurants, cafes, liquor stores, and takeout places.
Dianne Bleacher, a Callaway Henderson real estate agent in town since 1975, also believes that the rental market is softer than usual at this time of year. “It’s not dire,” she says, noting that traditionally the busiest months of the rental season are May and June. “But it will be an interesting summer.” Bleacher also notes that there are more single family houses than usual for rent. “They usually sell,” she says. “Some landlords may have to soften their prices a little.”
Avalon Princeton is larger in scope than any rental project previously introduced in town. While it may not offer all the same high-end details as some of its smaller, locally owned competitors, Avalon still has its long list of amenities. The project’s “signature” series units (all priced higher than the “classic” units quoted above) offer gourmet kitchens with quartz stone countertops, stainless steel appliances, enhanced light fixtures, porcelain floors and wall tiles in bathrooms, and “signature services” including complimentary move-in assistance, accent wall painted in the tenant’s choice of color, one complimentary resident lounge rental per residency, complimentary carpet cleaning at lease renewal, and invitations to “signature events.”
Ladell says that the resident lounge, fitness room that can accommodate nearly 50 people, and pet spa all exceed anything else in town. Its courtyard with a full-sized outdoor swimming pool is the only one of its kind at Princeton apartment buildings.
Sound inviting? A leasing agent (with revenue management system) is standing by: avalonprinceton.com.