From left: George Capodagli, president and founder of Capodagli Property Co.; Ankit Duggal, the firm’s executive vice president of capital markets and construction; and Brian Pfistner, vice president of asset management — Photo by Jeffrey Vock for Real Estate NJ
By Joshua Burd
The plans were years in the making, but as Linden Mayor Derek Armstead recalled recently, the city never had the interest it needed to spark the revival of one of its main thoroughfares.
That changed about four years ago.
“Well, all of a sudden some guy named George Capodagli comes in and he says, ‘I think I want to make Linden my home,’ ” Armstead said. “And that’s exactly what he’s done. He came here when no one else would come into this town and develop, and he put up one of the nicest buildings that we have in town.”
Armstead isn’t the first local official in New Jersey to say that about Capodagli and his firm, Capodagli Property Co., and he probably won’t be the last. The developer has become known for building in communities that are overlooked or turned away by other builders, all while focusing on what it considers to be middle-market renters who are priced out of truly high-end apartments.
To Capodagli, it all goes back to a philosophy of making people feel like they belong.
“That’s important to me — belonging — because I was raised in a family where belonging was important,” said Capodagli, the firm’s founder and president. “And that’s what I’m trying to do and I’m blessed with some great people that made my dreams become reality.”
The formula has propelled Capodagli to become one of the most active developers in the state’s bustling apartment sector in recent years. Under its Meridia brand of apartments, the firm has completed eight multifamily projects comprising some 1,100 units since 2010, with another 950 under construction and some 2,000 more in various stages of approvals.
Among those completed projects is a 175-unit development on Wood Avenue in Linden, where Capodagli has been headquartered since 2014. The developer joined Armstead and others last month to break ground on the 145-unit second phase of the project, known as Meridia Lifestyles II.
But Capodagli and his team aren’t content to simply fill their construction pipeline. The firm is also preparing for the next phase of its growth by launching a new hospitality platform that will become part of its future developments, starting with new café and restaurant concepts in Hackensack that will ultimately spread to its other properties.
All the while, Capodagli is expanding its holdings to include self-storage and other asset types that will benefit its core business. In future projects, that could also mean office or incubator space and other uses that will create a destination at its buildings.
“Hospitality is going to be the element that’s going to differentiate us for a good period of time,” said Ankit Duggal, executive vice president of capital markets and construction with Capodagli. He noted that the rest of the market will eventually follow suit, “so our growth value from there forward is really looking at it and saying: OK, what else can we do to create a unique experience?”
It’s been something of a meteoric rise for Capodagli, if that can be said for someone who has been in business for nearly 50 years. The Red Hook, Brooklyn native founded Capodagli Property Co. in 1970 at age 23, establishing what would become a full-service development, construction and property management firm in the decades that followed.
But Capodagli speaks rather modestly in describing the early part of his career. As he tells it, those years included everything from two- and three-family houses to construction, public work and other aspects of development, ultimately summing it up as: “I paid my bills, I fed my family and put five kids through college.”
He notes that he is an accountant by trade, which did not pay the bills but informed his career as a developer. But he also credited several mentors in the business, from Sidney Silverstein of Sparrow Construction to Larry Pantirer of BNE Real Estate, with whom Capodagli partnered on a project in East Rutherford more than a decade ago.
Soon thereafter, Capodagli said, “I came to the point of realizing that I want to own things” and pave the way for a long-term, multigenerational portfolio for his family.
That ultimately led to the firm’s first project under the Meridia banner: a 33-unit complex in the Bergen County town of Wallington, which opened in 2010. Capodagli recalls it being like many of the other towns that are now home to his buildings — a community in need of a lift, one that is open to redevelopment but unable to find a willing partner in the private sector.
“We’re not stupid risk takers, but willing to take chances and willing to see that there’s potential where most people say, ‘I’m not going there,’ ” Capodagli said.
Between 2014 and 2016, the firm opened 473 units across three projects in West New York, Rahway and Bound Brook. Capodagli’s pipeline quickly filled with other plans, as the firm continued to be first developer in untapped downtowns, such as Hackensack, where it opened the 222-unit property known as Meridia Metro in 2015 and now has a second nearing completion.
In some of those communities, other developers have followed after seeing the success of a Meridia project that was the first in the market.
“He’s the guy that planted the flag,” Abel Gomez, the borough council president in Bound Brook, said in interview last year about redevelopment in his town. “He built it and they came, and now we have four other guys who said, ‘Oh, wait — it works. Your building is full and you’re making money.’ And the single greatest effect that that building has had was this opening of everybody’s eyes to what Bound Brook really is.”
In the process, Capodagli has tapped into a market that experts say is underserved in New Jersey. Monthly rents at the firm’s projects typically range from $1,500 to $2,200. According to Otteau Valuation Group, of the roughly 37,000 apartments built in northern New Jersey over the past five years, only 31 percent of those units were priced under $2,200.
With the growth of its footprint over the past four years, Capodagli saw an opportunity to leverage that scale to improve its offerings for residents. In January 2017, the firm announced a partnership with Uber in which it established designated pickup and drop-off locations at the buildings, creating what it viewed as a distinctive amenity.
Capodagli is quick to point out that the Uber deal and other innovations have resulted from the addition of young, creative talent that has bolstered the team around him. For instance, he points to Duggal and Brian Pfistner, the firm’s vice president of asset management, “who are basically running the company.”
“Companies are built on two things,” he said. “You need money, but it’s people that are most important, and you need to attract them.”
Capodagli now employs around 60 in its Linden headquarters, a brick firehouse that has been retrofitted as a sleek, two-story office building. Its newest team members include Nicolas Geeraerts, a longtime restaurateur who has worked with the likes of Delmonico’s and Vornado Realty Trust and now serves as Capodagli’s director of hospitality, as the developer rolls out what’s known as Cap Hospitality.
“It’s part of the evolution of the company to start this hospitality arm and create greater amenities for the tenants,” Pfistner said. “At the end of the day, the objective is to keep the buildings full and to give the tenants something to assist in differentiating us amongst other developers.”
Geeraerts will oversee all of the firm’s commercial spaces as it builds out the platform, which will begin in Hackensack with a formal launch slated for this summer. At Meridia Metro, located at 100 State St., it will open a 250-square-foot café known as Cap O’ Joe at what was previously a sales office. The developer has partnered with Vittoria Coffee as part of the operation.
When the developer opens its second Hackensack project, a 105-unit building at 240 Main St., the ground-floor space will be home to the first Cap Diner, which Geeraerts describes as a modern, farm-to-table twist on the classic New Jersey diner. Slated to open this fall, the space will not only be inviting but lend itself to exposure on social media by virtue of its interior design, which includes details such as subway tiles, polished concrete and reclaimed woods, along with barn doors and custom artwork.
Capodagli expects to build out the hospitality platform over the next three years, with plans to incorporate the spaces in each of its projects going forward. Its newest development in Linden, Meridia Lifestyles II, will have a 4,000-square-foot ground-floor restaurant when it opens in late 2019. In neighboring Roselle Park, the firm is planning a street-level retail plaza as part of its 212-unit Meridia on Westfield project, similar to what it will have at a project in Dover.
“I think as we get further into this whole process, people want an atmosphere,” Capodagli said. “They want the feeling of belonging, they want socialization.”
The firm also plans to augment the platform with a new portfolio-wide rewards program known as the Meridia Black Card. Under the program, tenants will receive a monthly recurring credit to be used in any Cap Hospitality venue, which is aimed at creating additional interaction and value across Capodagli’s different properties.
“It gives us an opportunity to showcase what we do well to our tenants and it creates that forum where the tenants belong to something,” Geeraerts said. “I think that’s really important. And we’re doing that throughout our portfolio, so if you are a Capodagli Meridia tenant, and you’re meeting in Hackensack and you’re living here in Linden, you’ll be able to use that credit at any of our hospitality businesses.”
Meantime, the developer will continue to refine the apartment buildings that serve as its foundation. To Capodagli, that means tweaks such as phasing out bathtubs and moving away from “enormous kitchens” that often go unused by residents.
“We keep revamping everything and we keep looking at everything,” Capodagli said. “We keep looking at: What do we need to stay current, how are we going to stay current, how are we going to attract people?”
But the developer is also thinking bigger and bolder after having established its base of stabilized, income-producing apartments across northern and central New Jersey. Among other projects, that could mean retrofitting a historic, riverfront industrial building in Passaic, where Capodagli envisions apartments and office space with a promenade and a water taxi.
“We’re building this portfolio out,” he said. “You know, something like the bread and butter pays the bills. That’s important, but if it’s exciting, I want to do it. I want to do exciting things.”
The firm is also in contract to acquire a catering hall in northern New Jersey, with plans to build a new 102-key hotel and conference facility alongside the property. At the same time, it’s developing two 100,000-square-foot self-storage projects in Bound Brook and North Arlington, which could end up providing another benefit to Meridia residents.
“The evolution really is diversification,” Duggal said. “We’re looking at anything that has an ancillary growth value to our portfolio and product, but still keeping our focus on our core and something that we want to continue doing.”
Linden Mayor Derek Armstead spoke in late May at the groundbreaking for Capodagli Property Co.’s new Meridia Lifestyles II project in the city. — Photo by Jeffery Vock/Courtesy: Capodagli Property Co.
Meridia Lifestyles II will be Capodagli Property Co.’s second project in Linden and one of many in Union County — and there are more on the way.
The developer also plans to purchase, clean up and redevelop the former United Lacquer warehouse property on West Elizabeth Avenue in the city and build some 350 apartments. Linden Mayor Derek Armstead hailed Capodagli’s commitment to the city during last month’s groundbreaking ceremony, especially when it came to the firm’s pledge to revive what has been a “rundown, dilapidated, abandoned property” for more than 30 years.
“That’s going to transform this town,” Armstead said. “And what that’s going to do for this town I can’t even begin to talk about. So we thank you for all you’re doing. And we know that this is just the beginning.”
Capodagli is also adding to its robust portfolio in neighboring Rahway. The firm already has 311 units in the city from three completed projects and is set to begin the first phase of Meridia Brownstones, a planned 487-unit project 1900 Elizabeth Ave.