How CRE Investors Use Human Mobility Data - Part Two

How CRE Investors Use Human Mobility Data - Part Two

Today we continue in the persona of a commercial real estate investor who wants to use our tools to research investment opportunities for a new mixed-use, low-rise residential property in New Jersey. In our previous post, we identified Monmouth County to the south of the state as a desirable area. 

We want to create a development on or near a large, public outdoors space, so people have room to roam with confidence in the pandemic era. To continue our research, we’ll use a combination of Unacast’s tools: Neighborhood Insights, Venue Explorer, and the Retail Impact Scoreboard. We’ll pick-up exactly where we left and drill-down to find opportunistic communities in Monmouth. 

South central Monmouth communities look promising

Off the top, the area around Jackson Township, Millstone Township and Cream Ridge near the center of the county jump-out. All three come in under our maximum density of 1,000 people per km2. Lakes, parks, golf, farmland and the I95 are all nearby. Foot traffic in the eleven connected CBGs in the area is recovered and actually up between 28% and 176% against both pre-COVID levels and as compared to 2019, except in Block Group 2, to the north of Millstone, which is down just 4%. So, area recovery is strong in general.

Locals are spending more time in the area and Workers have returned and then some, with related foot traffic up as much 36% over this time last year. Collectively, the 11 CBGs we’re examining merit a ‘recovered’ status with flat to upward momentum generally, punctuated by lingering drag in some industries. We can see which ones by opening the Retail Impact dashboard in another tab.

Jackson Township industry and retail recovery

As of August 11, New Jersey industry on the whole is in a Cold state with a Stopped recovery trend. That’s largely driven by continued weakness in the Restaurant, Retail, Services and Travel industries, in-line with national trends. Home Goods and Improvements visits are up 7% in NJ, as are visits to the Grocer. The Jackson area specifically though is faring better than other areas of New Jersey, as we can see by turning back to the Neighborhood Insights tool.

Collectively, the 11 CBGs in and around Jackson Township have achieved near total foot traffic recovery versus pre-COVID-19 levels. Residents who used to commute to work in the city are now full-fledged Locals working at home or making the short trip to nearby offices for a variety of IT and life sciences companies, which are the leading industries in both Jackson Township and in New Jersey on the whole. Likewise, Non-Locals have returned to visit Jackson’s area attractions, with foot traffic at Six Flags and other venues having fully recovered from COVID lows and now growing more than 50% versus 2019. Several brands in the local area are doing pretty well, also. 

A quick look at the Venue Explorer shows that the CVS pharmacy in Jackson is outperforming the brand nationally in terms of visits recovery by about 33% since May 3rd of this year when traffic bottomed-out. That’s down just marginally over 2019 venue visit levels, which were about 2,000 per day. 87% of all visitors to this CVS location come from within 9 miles of the store, indicating a deep local engagement. The next nearest pharmacy, Walgreens, has actually fallen below brand average at about 1,300 visits per day, despite being located in a more densely populated area that is also closer to a major highway -- further proof that people will now travel a little farther to avoid a crowd or find what they need.

Clothing retailer Banana Republic’s traffic numbers in Jackson are also noteworthy. Despite a Cold Retail Clothing industry status with a Stopped recovery trend statewide, the Banana Republic store at 537 Monmouth Road in Jackson is positively booming. The venue the store is located in, the Jackson Premium Outlets, recorded 3,224 visits on August 10th 2020 -- nearly 5x the brand’s average daily visits per store nationally. 

The strength of that venue’s recovery affords its resident brands greater relative ability to draw consumers to the area and benefit from cross-visitation to other brands and area venues. That’s an excellent asset to help draw traffic to Jackson while most of the rest of New Jersey’s retailers continue to struggle mightily elsewhere. It will also be a convenient amenity for our future residents.

The local market

Retail space around Jackson is currently leasing for about $20 per square foot in commercial strips. By building new, COVID-era safe retail spaces, potentially including a multi-fulfillment center setup, we can do better than that $20, and also make our hard one-time costs and ongoing maintenance spend more efficient by implementing digital facilities management from the get-go. The quality retail lessees we want to pursue will value these considerations.

A 3 bedroom, 2 bath condo with decent amenities sells for about $235k or $135 per square foot, with a monthly HOA of $225 and a total tax assessment on the land of $180,000. That’s in an area where detached homes average about $358,887 on the market. There are some smaller low-rise projects in the townhome style, but no direct competition in terms of a modern multi-use development, so we get to be trailblazers if we build in Jackson. That’s a risk or an opportunity depending on your worldview. 

As to a specific location, there is currently a listing at 583 N County Line Rd priced at $1,000,000 flat that may suit. The land, which is about 70 miles or a 1 hour and 20 minute drive to Manhattan, is a package consisting of 4.64 acres currently zoned Highway Commercial, with an attached 10 acres zoned R3, so multi-use could work out with a little nudge.

There are schools and parks nearby, a significant residential development just down the road, and property values in the area are increasing. It’s a bigger piece of property than we need, but that opens the possibility to add additional units in the future, or develop some of that land as a trail system, or something else for our residents and visitors. There are restaurants and shopping within a few miles, including the aforementioned Jackson Premium Outlets, as well as quick access to the I95, which connects points east in New Jersey and west everywhere else.

There’s a starting point.

Is this the only listing in Jackson or elsewhere worth looking at? Nope. Is what we’ve shown you here the limit of our tools? Not even close, we’ve barely scratched the surface. Care to know more? 

Please contact us and we’ll be happy to help you learn how CRE investors can use Unacast’s datasets and tools to improve research capabilities and business performance. 

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