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MF Deals in the State Not Due to Distress, Yet

ELMWOOD PARK, NJ-'I do see some distress sales--real estate asset and notes--but not to the voluminous level that most investors were waiting on the sidelines to see,' says Gebroe-Hammer's Ken Uranowitz.

By Alyson Grala | Updated on December 15, 2009

ELMWOOD PARK, NJ-Statewide apartment vacancy rose 130 basis points year-over-year to an estimated 4.8% in the third quarter, according to a report from Marcus & Millichap Real Estate Investment Services. After 1,740 rentals came online in 2008, 1,620 units will be added to stock statewide this year, with around 1,330 units delivered in Northern New Jersey and 290 units brought online in the central region, the report predicts. Meanwhile, asking rents have dipped 1.5% to $1,287 per month, and effective rents dropped 2.9% to $1,233 per month.

In the northern portion of the state, apartment revenues declined the least in Passaic County, where more modest rent cuts have kept vacancy below 4%. Meanwhile, revenues remain stable in the Princeton/East Mercer County submarket as a result of steady demand generated by high student and employer concentrations.

On the development front, a lack of projects in Central and Southern New Jersey is expected to support stable operations through the coming months. But in Northern New Jersey, builders will expand local stock by more than 2,600 units over the next five quarters, creating a potentially sizable supply-side threat.

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