Livingston, N.J. – As the shift of single-family home ownership continues to trend toward rentals among the Millennial population and emptynesters, robust demand for apartment investment assets in 2018 have paved the path for 2019, according to Gebroe-Hammer Associates.
The New Jersey-based firm, which is the top multi-family brokerage firm throughout the New Jersey, New York State and Greater Philadelphia Metro corridor, closed out 2018 with over $1.1 billion in total transactions – a positive indicator of favorable conditions throughout 2019.
“Since Gebroe-Hammer’s primary focus is multi-family property sales, these totals are solely attributed to apartment buildings that run the full spectrum of asset classes – from Class-A trophy buildings to value-add Class B/C midrise properties and garden communities poised for capital improvements, unit renovations and repositioning,” said Ken Uranowitz, Gebroe-Hammer president, who joined the firm at its inception in 1975.
“No other firm – regional or national – within our submarkets can even come close to these benchmarks, which exclude office, industrial, retail properties and leasing activity.”
During the month of December alone, Gebroe-Hammer arranged 14 trades valued in excess of $114.21M encompassing 1,076 units. These spanned North and Central Jersey’s Bergen, Hudson, Essex, Union and Monmouth counties (9 deals/472 units/$58.5M) as well as Greater Philadelphia/South Jersey (5 deals/605 units/$55.71M). Adding to this momentum, Gebroe-Hammer Associates finished January with 775 units sold for $132.05 million.
Cities and High-Population-Density Municipalities Capture Investor Attention
In Northern New Jersey’s urban-core centers alone, Gebroe-Hammer reached a 389-unit high in the latest two-month period. These investment sales spanned Newark and Elizabeth, both of which have exhibited enduring demand and are attracting renewed interest associated with local revitalization initiatives.
“Market-rate apartments – in terms of investment and performance – are on the upswing thanks to a renewed focus by public officials on urban sustainability and the creation of transit-centric residential/commercial/leisure enclaves,” said Executive Managing Director David Oropeza, the firm’s inner-city specialist who spearheads the firm’s North Jersey Metro teams. “While mixed-use is defining modern-day developments, low-, mid- and high-rise residential product has been and continues to provide a solid foundation for the future. Veteran investors are expanding their holdings while those with success in surrounding core cities are now dipping their toes into these emerging submarkets.”
According to Gebroe-Hammer, other North Jersey cities undergoing revitalization initiatives mirroring those of Newark and Elizabeth include East Orange, Irvington, Hackensack, Harrison, Plainfield and Paterson. These cities are implementing master plans similar to that which has been extremely successful in Hudson County.
While initial Hudson County redevelopment efforts focused on the waterfront, infill neighborhoods are now benefitting from westward expansion. In the past few years, redevelopment has extended further away from the “Gold Coast” to include non-waterfront neighborhoods. In turn, this is drawing a new post-undergrad millennial tenant pool that craves the affordability, transit accessibility and lifestyle of the “Brooklyn of New Jersey.”
Although smaller apartment buildings once characterized the Hudson County apartment landscape during the past 7 to 10 years, that has all changed. Today, the municipalities of Jersey City, West New York, North Bergen, Guttenberg and Union City are being targeted by private family offices, REITs, private equity funds and other institutional investors seeking value-add multi-family investment opportunities to expand their portfolios.
This was demonstrated in 2018 when Gebroe-Hammer Executive Vice President Nicholas Nicolaou finalized the disposition of a 118-building, 2,137-unit Hudson County multi-family portfolio on behalf of a single seller, a private unnamed investor. In total, the Gateway Portfolio was broken out into six separate packages sold for a combined total of $327,846,200.
“The Gateway Portfolio in its entirety and as separate packages presented an extremely rare multi-family investment opportunity,” explained Nicolaou. “It marked the highest concentration of for-sale stabilized assets in Hudson County ever to come to market.”
And just last month, Nicolaou closed the $75 million sale of another portfolio that spanned Hudson and Bergen County, with the highest concentration of properties located in Union City. Combined, the 16 properties featured a total of 419 units ranging from one-to-four bedroom layouts. “Historically a family-oriented city once dominated by brownstones, two-family homes and locally owned businesses, the ‘Hobokenization’ of Union City has resulted in positive comparisons to its surrounding North Hudson counterparts,” added Nicolaou.
In addition to arranging sales involving more than 8,200 units in 2018, Gebroe-Hammer was the only Northeast firm named among the “Top Multi-Family Influencers” in the nation for its consistent sales performance. Gebroe-Hammer exceeded its record-breaking 2015 and 2016 transaction benchmarks in 2017 by recording four separate sales exceeding $100M each. Among these was one of the nation’s top-20 single-asset multi-family deals of that same year.
“Our brokerage professionals are deeply entrenched in the tri-state area’s ever-evolving multi-family investment markets. As a result, our area expertise, coupled with an expanding client base and services, has grown at a pace commensurate with the surging development and gentrification of urban and suburban municipalities during the past decade,” said Uranowitz, who noted the North Jersey metro – along with all of the other submarkets in which the firm is active – has experienced consistent rent increases over the past 12 months.
Since 1975, Gebroe-Hammer’s brokerage activities have concentrated on all multi-family types, from high-rise to garden-apartment properties. In addition to its focus on apartment buildings, Gebroe-Hammer markets mixed-use and free-standing office and retail properties. Widely recognized for its consistent sales performance, the firm is a 14-time CoStar Power Broker.
