Gebroe-Hammer Predicts New NYC Rent Control Laws Will Bring ‘Onslaught of Investor Demand’ in New Jersey

LIVINGSTON, NJ—Locally-based real estate investment firm Gebroe-Hammer Associates reports closed multifamily sales of more than $820 million in the first half of 2019, and expects continued strong activity for the remainder of this year in that market due in part to strong market fundamentals and stricter rent control laws across the Hudson River.

Gebroe-Hammer Associates reports multifamily sales encompassed 5,675 units year-to-date at the close of the second quarter involving 65 deals arranged on behalf of a diverse client base of private individuals, private equity firms and institutional investors.

“These benchmarks indicate a Gebroe-Hammer transaction increase of approximately six percentage points over the same time period last year—signaling that the investor confidence index remains very high as brand new apartment-property deliveries top off this year and apartment-fundamental pressure eases,” says Ken Uranowitz, president of Gebroe-Hammer.  “In turn, these conditions will only feed rent growth and property appreciation over the next five to 10 years and beyond, based on forecasted demographic patterns.

Among Gebroe-Hammer’s notable sales in New Jersey during the first half of 2019 was the $75-million North Jersey Metro portfolio sale of 487 units spanning the state’s most densely populated counties of Hudson and Bergen counties. The seller was Madison Hill Properties and the buyer was a private investor. As a follow up, Gebroe-Hammer also arranged the $58.5-million sale in May of New Providence Gardens, a 232-unit garden-apartment community located within one of the most affluent corners of the state.

“With the recent passing of onerous rent control legislation in New York, we expect to see an onslaught of investor demand in New Jersey shifting from across the Hudson River to out-commuter-dense submarkets. In turn, this will create an even wider delta where there is an already constrained demand/supply imbalance, which will intensify pricing pressure and deepen cap-rate compression,” Uranowitz notes. “The anticipated lowering of interest rates by the Fed this year just adds more fuel to this fire.”

Other key Garden State trades so far this year include the $17.87-million sale of 168 units and $16.59-million sale of 134 units at 100 Swartzwood Rd., and 2 Center St., in Newton and Sussex, NJ respectively. The firm also has closed more than $78 million in urban-core sales spanning Bayonne, East Orange/Orange, Elizabeth, Irvington, Jersey City, Newark, Plainfield and Union City.

The Greater Philadelphia/Northeast Pennsylvania metro has been another hotbed of activity for Gebroe-Hammer in 2019. Since January, the firm has arranged more than 16 trades encompassing over 2,070 units valued in excess of more than $210 million. The garden-style and mid-rise/high-rise properties involved in these transactions are located in Philadelphia, Bucks and Chester counties as well as South Jersey’s Atlantic, Burlington, Camden and Gloucester counties.

While focused on suburban garden-apartment and urban mid- and high-rise properties, Gebroe-Hammer’s geographic areas of concentration are centered in New Jersey and extend to southeast Pennsylvania and southern New York State. In addition, Gebroe-Hammer markets mixed-use and free-standing office and retail properties and represents client interests nationwide.