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Deals & Dealmakers

$300M multifamily trade a sign of strong investor appetite for New Jersey housing

Gebroe Hammer brokered the sale of 1,800 units spread across affluent towns such as Edgewater.

Gebroe-Hammer Associates brokered the $300+ million sale of a multi-property portfolio with over 1,800 units spanning the high-barrier-to-entry submarkets of Northeast Essex and Bergen counties in Northern New Jersey.

The 1.12-million-square-foot, 134 building portfolio is predominantly comprised of one- and two-bedroom layouts, some of which include duplex-style options at select communities.

Ken Uranowitz, president, and Joseph Brecher, executive managing director, engineered the sale along with team members Executive Vice President Greg Pine, Senior Vice President Debbie Pomerantz and Sales Representative Tim Blashford.

The firm exclusively represented the unnamed seller, a long-time Gebroe-Hammer client, and identified the buyer.

“This sale marked an unprecedented concentration of well-maintained apartment homes to come online in the state’s highest-barrier-to-entry multi-family investment markets,” Uranowitz said.

“Once in a generation, if ever, does a portfolio of this magnitude come to market in such desirable locations offering value-add appreciation opportunities through unit renovations and capital-improvement implementations on a grand scale.” 

“While the highest concentration of the North Jersey Metro Portfolio’s historically stabilized and well-occupied multi-family properties span two of Northeast Essex’s most-popular out-commuter neighborhoods, approximately 40% of the units are centrally located in the affluent Bergen County submarket, just a few miles from the metro’s epicenter of employment – Midtown Manhattan,” said Brecher.

“Each also offers walkable proximity to transit as well as a short distance to upscale retail, dining and cultural attractions extending from Upper Montclair to Hackensack and Englewood Cliffs.”

Collectively, the portfolio properties feature market-unique floorplans, ranging from studios to two-bedroom duplexes. Each apartment-home includes newly finished hardwood floors, decorative window coverings, full-sized kitchens with modern appliances and baths with ceramic-tile flooring and ceramic tubs and sinks.

The garden-style complexes also feature landscaped grounds.

All are close to schools, shopping, dining, transit and adjacent parks with trails, tennis, ballfields and other recreational amenities. Garden State Parkway and I-95/New Jersey Turnpike access points are nearby.

In its midyear outlookf for the North New jersey Multifamily Market, Marcus and Millichap notes that demand continues to outplace supply growth, with rental availability falling despite a rapidly expanding pipeline of projects.

According to Marcu & Millichap, although builders have added more than 22,000 apartments since the beginning of 2016, rental demand has far outpaced supply growth as tenants throughout the Tri-State area seek out a¢ordable options.

Vacancy has contracted meaningfully in this environment, falling below four percent as the spread between the New York City boroughs and comparable options can exceed $3,000 per month in some cases.

Although new supply additions will reach a new cycle high this year, continued employment growth is expected to help keep net absorption elevated, fueling another year of rental rate increases that surpasses the rate of inflation.

The real estate service firm predicts Hudson County rates will exceed the regional average, underpinned by easy commutes into the employment centers in Lower and Midtown Manhattan.

“The limited supply of properties listed for disposition has muted activity in the $20 million-plus transaction market despite high investor demand for assets in the metro,” notes Marcus & Millichap.

“But investors seek to take advantage of the market’s proximity to Manhattan but at higher yields and lower pricing
per unit than seen across the Hudson River.”

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