www.marejournal.com
6C — June 26 - July 16, 2015 — Mid-Year Review — M id A tlantic
Real Estate Journal
M ulti -F amily S ales Latest sales exceed $165 million spanning two-week timeframe
Gebroe-Hammer Associates reports historic multi-family transaction pace at mid-year mark L IVINGSTON, NJ — Extremely favorable demographic and em- Apartments in Roselle Park; and $11.2 million sale of 80 units in Mount Arlington, all in New Jersey.
ployment trends, coupled with sustained rent and valu- ation appreciation, are the leading drivers of historic multi-family trading along the New Jersey/Pennsylvania corridor, according to invest- ment brokerage powerhouse Gebroe-Hammer Associ- ates . At the mid-year mark, the firm’s transaction pace is on track to surpass last year’s benchmarks, as evidenced by the recent $165.8+ million in sales involving 912 units in a two-week timeframe. “On the heels of a ‘for-the- record-books’ 2014 in the multi-family investment sec- tor, 2015 continues to exceed expectations in terms of occu- pancy rates, rent growth and trading velocity, which is tra- ditionally slower in the first months of any new year,” said Ken Uranowitz , president, who predicts the current pace will pick up through year-end and beyond. During the past six months, the firm has arranged 51 trades encompassing 3,049 units. In one of New Jersey’s largest transactions to date this year, the Gebroe-Ham- mer brokerage team, led by managing director Joseph Brecher , represented the 40+ year owner/seller of a two-property package in a sale that garnered a com- bined price of $113.5 million. Gebroe-Hammer represented Forest Realty in the estate sale and also identified the buyers of Short Hills Village Club (Springfield) and Frank- lin Manor (Morristown). “Like virtually every urban and suburban municipality in and around top-performing cities like Manhattan and Philadelphia, these are highly desirable multi-family in- vestment markets due to the strength of their tenant pool, sustained population growth and proximity/connectivity via mass transit to employ- ment centers,” said Brecher. These same trends also contributed toward the $36 million sale of River Place on the Rahway River in Rah- way; $33.25 million trade of a 250+-unit garden-apartment community in Ocean County; $17.15 million trade of Vil- lage Apartments in Union; $12.17 million sale of Grande
Existing Properties are Multi-Family’s “Bread and Butter” Strong fundamentals and investor appetite also are feeding property and rent appreciation of existing apart- ment buildings – the sector’s “bread and butter” assets – throughout the Mid-Atlantic region. A majority of these properties are at a point in their life cycles where they are poised for or have under- gone recent value-add renova- tions. “Throughout New Jersey and Philadelphia, there is a high concentration of post- World War II-era apartment buildings that make up multi- family’s enduring core stock and leave little open space for new ground-up development,” said David Oropeza , man- aging director. “As a result, these class B and C assets record historically strong occupancy rates and rent growth/property reposition- ing opportunities associated with investor-implemented upgrades to kitchens, baths and flooring.” Gebroe-Hammer consis- tently arranges a steady stream of these trades, rang- ing from suburban garden communities to urban mid- rise buildings, in key submar- ket strongholds. These include Newark, The Oranges, Irving- ton and Belleville in Essex County; Englewood, Lodi and Edgewater in Bergen County; Jersey City, Hoboken, Union City and Bayonne in Hudson County; Elizabeth and Plain- field in Union County; and Cherry Hill as well as other South Jersey municipalities and neighborhoods in and surrounding Philadelphia. “While multi-family con- struction starts are expected to continue their upward trend, mostly in cities where distressed, abandoned build- ings such as former ware- house space is undergoing an adaptive reuse, the new supply is in no way threaten- ing to outpace investment or tenant demand,” added Oropeza, an urban market specialist. “The tenant pool is actually growing as Millen- nials and empty-nesters are drawn to areas undergoing gentrification.”
580 Washington Ave., Belleville, NJ – a “bread and butter” multi-family asset sold this year by Gebroe-Hammer – is a well-located, well-tenanted property that is an example of the Mid-Atlantic region’s high concentration of existing apartment-buildings.
of the most expensive places to live in the United States. Easing credit standards and lower FHA mortgage insur- ance rates are not expected to be enough to jumpstart this housing sector anytime soon. “Rising home prices, albeit slow, and the inevitability of rising interest rates will only lower affordability for families struggling to meet today’s lending standards,” said Uranowitz. “Renting also eases other burdens related to homeownership, such as paying real estate taxes, landscaping/snow removal and on-going general inte- rior and exterior repairs. For this reason, the tenant base is comprised of retirees, col- lege-educated professionals, families and hard-working individuals.” Based in Livingston, NJ, Gebroe-Hammer is one of the most active multi-family investment sales brokerage firms in the tri-state region. The firm’s brokerage activi- ties concentrate on suburban and urban high-rise and garden-apartment properties throughout the Northeast and nationally. The firm also markets mixed-use and free- standing office and retail properties. Widely recognized for its consistent sales perfor- mance, the firm is a 10-time CoStar Power Broker. n
River Place, Rahway, N.J., a 136-unit luxury apartment complex built in 2005, sold for $36 million in a deal arranged by Gebroe-Hammer.
ket, will keep demand high for multi-family units.” Weak Single-Family Housing Market and Affordability Steer People toward Rentals Millennials and their pro- pensity to shun single-family homeownership coincides with a housing market that is expected to remain weak for some time. Despite the low interest rate environment, affordability remains ques- tionable for most profession- als and families throughout the Northeast, which is one
Favorable demographic trends and continued expan- sion of the labor market will feed rent growth throughout the rest of the year. Spe- cifically, one key driver is the age 25 – 34 young adult demographic. “This age group has been and will continue to be crucial to multi-family performance,” added Ura- nowitz. “Millennials have made a comeback and their numbers will continue rising for the next several years. This, along with a sluggish single-family housing mar-
Made with FlippingBook - Online magazine maker