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2C — September 25 - October 15, 2015 — Fall Preview — M id A tlantic
Real Estate Journal
N ew J ersey M ulti -F amily S ales By Steven Matovski, Redwood Realty Advisors Apartment sales heating up in Hudson County
T he hot apartment sales market in New York City has investors wid-
growth and a positive outlook for continued renter demand. Hudson County is already
Manhattan. That proximity and easy access for commuters is fueling incredible activity
to the for-sale market are re- porting even tighter vacancies at just 2 or 3%. Hudson County is continuing to see steady growth in new household formations, and the county also is benefitting from the escalating rents in New York City that are pushing renters to look for less expen- sive housing options. People are turning to alternatives such as Jersey City, Hoboken, Weehawken, West New York, Union City and Bayonne where they can spend thousands of dollars less per month on rent and still be within easy reach
of the city. Hudson County has a number of transit hubs that get people into the city quickly, in some cases adding only about 10 extra minutes to commute times. Combined, those factors are spurring robust sales activity across the spectrum from high- end Class A properties to older Class B and C apartments that offer more value-add oppor- tunities. According to CoStar, Hudson County has seen some $273 million in apartment sales in the past 12 months. Investors are finding upside with opportunities to retrofit older buildings and push rents higher with upgraded interiors or new amenities. In some cas- es, developers are gutting the interior all the way down to the building shell and completely redeveloping the property to create “like-new” assets. And that apartment market continues to expand. There are about 9,300 units under construction according to Co- Star, but we expect to see good absorption for that product, because much of it appeals to a different renter and a differ- ent price point, than some of the older properties. The new construction and the still high occupancies among existing properties points to the strong demand in the market. It’s really a great time for both buyers and sellers. On the sell side, owners are able to capitalize on the high de- mand and competitive prices that buyers are willing to pay in today’s market. For every property that comes to market, there are at least a dozen quali- fied bidders chasing that deal. In northern New Jersey, Class A cap rates have compressed approximately 100 basis points to 4.5% from its 5 year average of 5.5%. Meanwhile, cap rates for Class B and C product in Northern New Jersey are in line with their 5-year average at around 7%. On the buy side, investors are attracted to a market that still has good upside with strong renter demand and steady rent increases. So, we are really excit- ed about the activity we’re seeing in Hudson County as more buy- ers discover the opportunities that exist in the market today. StevenMatovski is a direc- tor at RedwoodRealty Advi- sors in Hasbrouck Heights, NJ. Matovski heads the company’smultifamily sales team in Hudson County. n
ening their t a r g e t f o r p o t e n t i a l buying op- portunities a n d Hu d - son County i s l and i ng firmly in the crosshairs.
“It’s really a great time for both buyers and sellers. On the sell side, owners are able to capitalize on the high demand and com- petitive prices that buyers are willing to pay in today’s market.”
home to a sizable population base and a large concentration of multifamily properties with an inventory that spans some 96,000 rental units. According to data from CoStar, vacancies are currently hovering at about 4.3%. However, many of the properties that we see coming
in both apartment sales, as well as new development and redevelopment projects aimed at satisfying demand from the growing rental market. Investment sales in particu- lar are heating up thanks to strong fundamentals – namely healthy occupancies and rent
The Northern New Jersey County is practically another borough to NYC thanks to its prime location directly across the Hudson River from Steven Matovski
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