Amtrak’s Northeast Corridor (“NEC”) is one of the busiest and most complex rail systems in the world, connecting 8 states and the District of Columbia. The NEC accommodates more than 260 million intercity riders and commuter rail passengers each year, as well as six freight rail operators on its 457 miles of track. By 2040 passenger trips on the NEC are estimated to increase to over half a billion.
A 20-acre site located at the NEC’s Princeton Junction train station was approved for mixed-use development by the local community of West Windsor. Although the site is well located along this vital rail link, and also has excellent highway access, what had been approved for the site was no longer economically viable. Issues such as the amount of retail space, the density of residential uses, and the amount of parking required in the original plan were all based on outdated market preferences and economics.
To understand the project’s current feasibility and to assist the developer in creating a new plan, RESGroup completed detailed analyses of the residential townhome, residential rental apartment, office, and retail real estate markets. Relevant economic and demographic data for each use type was reviewed, and demand and pricing levels for town homes, rental apartments, office and retail space were all estimated. Interviews were conducted with local brokers, property owners, and investors to better understand potential profitability as well as required debt and equity returns. Two alternative scenarios were considered, as were changes that may be needed in the approved plan to improve project feasibility.
RESGroup also analyzed case studies of TODs to identify critical success factors and lessons learned regarding development near train stations and other transit nodes. For each of the case studies, data on the development program, timing, relative success, type of transit access, commuter volumes, and local demographics were obtained and analyzed. The case studies demonstrated to the public sector how similar projects either succeeded or failed, and the success factors that could be applied to Princeton Junction. The original plan’s requirement for large amounts of retail and high development density made it difficult for this project to provide the developer with their required return without public incentives. Based upon a revised plan accepted by the Town, AvalonBay Communities currently has plans to redevelop the site including 550 apartments, 150 town homes, 100 senior housing units, 37,000 square feet of upscale retail, and a 120-room hotel.
