LIVINGSTON, NJ–Multi-family property owners realize the market may be reaching a peak time for selling, a window of opportunity expected to continue into the second half of the year, Gebroe-Hammer Associates tells GlobeSt.com.
The firm arranged 67 transactions during the last six months, and says the multi-family sector should see more aggressive pricing at a growth rate surpassing pre-recession levels.
GH closed out June arranging 14 sales of 473 units throughout New Jersey, New York and Pennsylvania, selling for more than $53 million.
“Buyers have set new benchmarks for what they are willing to pay in an environment characterized by continued historically low interest rates, abundant availability of capital and soaring demand in an undersupplied industry,” says Ken Uranowitz, GH president, a 39-year industry veteran. “There is a voracious appetite among investors for all building classes, with value-add opportunities ranking highest in terms of acquisition strategy. These conditions are expected to gain traction through year end and well into next year.”
While properties that come to market in high-barrier-to-entry locations, like Bergen County, NJ, remain rare, Uranowitz says investors are looking for well-located, underperforming urban, suburban and rural properties with mass transit access and lifestyle services like dry cleaners, grocery stores and shopping centers, restaurants and leisure/recreational venues.
Common business plans include the implementation of renovation programs to reposition these properties, rendering them more competitive while allowing investors to realize a greater return on their initial investment, says Uranowitz.
“With homeownership still so far out of reach or undesirable for a majority of the population, renting has been and will continue to be the new normal,” says Uranowitz. “Millennials – who experienced the housing crisis of their parents' generation – also are joining the renter pool and setting down roots, strengthening an already fortified tenant base of hard-working families and empty nesters.”
The most active markets are New Jersey's northern municipalities and its Gold Coast, and Eastern Pennsylvania/South Jersey. These are among the most stable apartment-rental markets in the nation and offer a high concentration of multi-family properties built 30 to 40 years ago. Despite a rising number of planned construction projects in both regions that have yet to be built, the tenant base is diverse enough to solidify high occupancy rates across the board.
“New product enhances the overall posture of neighborhoods and cities for all residents of varying socioeconomic backgrounds, especially those who are priced out of Philadelphia or Manhattan,” says Uranowitz.
Even in the wake of the Superstorm Sandy disaster, Gebroe-Hammer reports multi-family trading activity in shore communities like Asbury Park and Lakewood is heating up. “The re-emerging economy and revitalization in these areas are drawing investors, particularly those who are experienced in repositioning properties,” says Uranowitz.
CORRECTION, 8/11/2014: An earlier version of this story included a headline describing the 67 multifamily sales with an incorrect dollar value of $53 million. That amount refers to the dollar value of GF sales in the month of June.
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Steve Lubetkin
Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].
