Four Toronto-based development companies have joined forces and broken ground at West Side Square, a 477-unit mixed-use community in Jersey City, N.J.
The development will be overseen by the West Side Square Development Fund — a focused investment fund led by LanTree Developments, Altree Developments, Lanterra Developments and Westdale Properties — which will harness each company’s decades of expertise in acquiring, developing and operating real estate assets across Canada and the United States.
Although this is the first time all four companies have worked together on a project, three of the firms have familial and professional connections while Lanterra and Westdale have also collaborated in the past.
Lanterra was founded by Mark Mandelbaum and Barry Fenton in 1999. Altree was founded by Zev Mandelbaum, one of Mark Mandelbaum’s sons.
LanTree is the operating business extension of Almond Tree Enterprises, the family office for the Mandelbaum family and its constituent family members. It’s headed by Lakewood, N.J.-based Raphael Mandelbaum, another son of Mark Mandelbaum, who has developed, owned and managed purpose-built rental properties in the state for 15 years.
Westdale is another family-owned company that has owned, managed and developed real estate across North America for more than 60 years.
Its Canadian portfolio includes the management and/or ownership of close to 7,000 residential units and more than 2.5 million square feet of retail, commercial and industrial spaces.
Westdale's U.S. portfolio includes the management of nearly 35,000 residential units across 150 properties in 30 cities, as well as three million square feet of retail and commercial space.
West Side Square Development Fund
The West Side Square site and a neighbouring parcel of land were acquired from a private seller for $48 million in 2019.
The West Side Square site at 66 Broadway — owned by sponsors Altree, Avenir Jersey Developments Ltd. (which is owned by affiliates of Lanterra) and Westdale, as well as minority co-investors — was attributed a value of $31.5 million.
Those owners combined to invest $24.2 million, according to Altree director of finance and investments and West Side Square Development Fund chief financial officer Natalie Leibowitz.
However, it was decided to create the West Side Square Development Fund and bring in hundreds of smaller investors willing to put in a minimum of $10,000 to advance the project in an efficient manner.
“We were looking at how to get this project moving, and the market is not an easy place to transact these days,” LanTree principal and West Side Square Development Fund chief operating officer Raphael Mandelbaum told RENX.
“We're not looking to take any money off the table, we’re not looking to de-risk the project, and we’re also not looking to over-leverage the project by borrowing at today's rates at a number that wouldn't make sense. Therefore, we decided to open up the doors for others to invest alongside a very experienced sponsorship group.
“That would enable us to deliver this project at a profitable level, even in today's high-interest-rate environment.”
“We raised $50 million US,” Leibowitz told RENX. “It was one of the fastest-subscribed IPOs in Canadian history.”
The fund has a term of four years plus two one-year extensions.
Leibowitz believes the West Side Square Development Fund, for which CIBC Capital Markets was the lead agent, will set a precedent for similar funds in Canada.
The capital stack will be completed through American bank financing, Leibowitz added.
West Side Square’s location
West Side Square isn’t subject to development charges and rent controls are exempted for 30 years. The purpose-built rental apartment has an estimated completion value of $307.6 million.
Altree and LanTree are the development managers for West Side Square, which is being constructed on the site of a former warehouse that has been demolished.
West Side Square is located less than a mile from the Journal Square PATH train station and will become a key piece in the continued transformation of the area when it joins a diverse mix of new housing, offices, retail and public open spaces found across the neighbourhood.
West Side Square is also located across the PATH tracks from Mana Contemporary, a million-square-foot arts centre situated in a 1920s-era former manufacturing building that features contemporary visual and performing arts programming and exhibitions and provides services and spaces for artists, collectors, curators, performers, students and community members.
The location offers commuter train service across the Hudson River to Manhattan as well as highway access.
West Side Square will encompass both sides of a dead-end street, which will allow for the creation of an enclosed pedestrian plaza.
“We're right at the hub of where we want to be in terms of connectivity and in terms of arts, culture and entertainment,” said Raphael Mandelbaum. “We're creating a district that has the components to be created, but has not been created yet.”
West Side Square’s components
West Side Square will feature 203 studios at 483 square feet, 235 one-bedroom units at 697 square feet, 29 two-bedroom units at 990 square feet and 10 three-bedroom units at 1,530 square feet in a building whose elements range from five to 12 storeys.
It’s not subject to affordable housing requirements.
Exterior amenities will include an outdoor deck with a swimming pool, grilling stations, seating and lounging areas, and a dog run. Indoor amenities will include a fitness centre, co-working spaces and a community room for private events.
West Side Square will also feature 9,814 square feet of ground-level retail space, 298 parking stalls, 150 storage lockers and 269 bicycle storage spaces.
West Side Square is scheduled to be completed in 2026, with lease-up to follow. Liquidity is anticipated in four years if all goes well.
The site acquired adjacent to West Side Square isn’t part of the fund, Leibowitz said.
However, rezoning for that property is being sought for another future development. It’s currently occupied by a mostly vacant building that has an operational Italian restaurant.