Projects are still getting built, albeit largely in-fill in the state's more urbanized areas. And while rental is performing best, one major project on the rise is a condo building here. Altessa will bring 100 residences to market next year in a 15-story package on New York Ave., being developed by the locally based Rocha Construction and Development Inc.
"Scores of interested buyers have added their names to our list," says Marcone Rocha, who notes that the Hoboken-based Patina Realty is marketing his project. "Many are single professionals or young couples."
Rocha is not the only one dealing with Hoboken, as Shipyard Associates will soon break ground there for the Berkshire, a 13-story, 171,000-square foot residential building with a ground-floor retail component. Designed by Minno & Wasko Architects, the building is aiming for LEED certification.
As far as those market statistics, Marcus & Millichap's Q3 numbers project apartment vacancies to reach 3.9% by year's end, up 50 basis points from the end of 2007, but still well below the national rate of 6.1%. And both statewide asking and effective rents are also on the rise, the former by 2.9% to $1,317 per month, the latter by 2.7% to $1,273. Via its Florham Park office the firm also reports that transaction activity is down by 22% over the past 12 months.
But properties are indeed still trading. For example, brokers Jonathan Greenberg and Don Baxter of the Woodbridge-based Kislak Co. recently pulled the trigger for three separate sales involving 85 units and some retail space. And all three properties had been on the market for some time, previously listed with others brokers. The buyers and sellers in all three cases were private investor groups.
In Bayonne, the 42-unit, six-store 548-554 Ave. C--95% occupied at the time of sale-- traded for just less than $3.4 million or about $80,000 per residential unit. In West New York, NJ, the 30-unit 205 66th St. went for $2.7 million, or $90,000 per unit. One hundred percent occupied at the time of sale, it's going to be renovated and has the upside of pending rent increases. Also in West New York, the 13-unit 108 60th St. went for $850,000 ($65,000 per unit), and the 100%-occupied building is similarly slated for some upgrades.
And the Livingston-based Gebroe-Hammer Associates has weighed in, in recent days, with an apartment building sale, this one in Montclair. The 14-unit 31 The Crescent was sold by Schelane Montclair LLC to 507 Grand Street Associates LLC as part of a 1031 exchange for $2.35 million, or a whopping $168,000 per unit.
"Montclair is a high barrier-to-entry area in which very few properties are marketed for sale," says G-H managing director Ken Uranowitz, who co-brokered the deal with SVP David Jarvis. "When a property like this is delivered to the market, competition is intense among well-financed investors.
"All-cash transactions and 1031 exchanges have become the norm as multifamily housing continues to outpace other commercial real estate class investments," says Uranowitz, who originally sold the building to the seller in 1995.
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