Livingston, N.J., – Multifamily continues to fare much better than its office and retail counterparts in the current protracted COVID environment, with investment sales remaining steady according to the investment brokerage professionals at Gebroe-Hammer Associates. During September and October, the Livingston, N.J.-based firm has recorded $164M in transactions involving over 1,030 units from North Jersey to the South Jersey/Greater Philadelphia Metro.
The transactions involved apartment-rental assets across North Jersey’s urban submarkets of Essex and Passaic counties, Central Jersey’s Monmouth County shore region and the Greater Philadelphia Metro submarket of Burlington County, N.J.
“Multifamily has rallied and once again is demonstrating its resiliency thanks to extremely strong pre-pandemic fundamentals,” said Ken Uranowitz, president, who has been with Gebroe-Hammer since its inception 45 years ago.
“As could be expected, there was a slight pause in the spring as the virus rapidly swept through the Northeast in its earliest days,” he added. “However, a vast delta persists between a continued industry undersupply and strong demand – not to mention a remain-in-place tenant philosophy and a prevailing investor mantra of ‘people always need a place to live’ – that have kept a significant majority of deals on track to close and a steady flow of assets coming online, both on market and off market.”
According to Reis/Moody’s Analytics, North Jersey’s building-dense apartment stock in particular has fared the COVID recession much better than major metros like New York City, where high rent/small living space has prompted a migration to the suburbs. The full span of the North Jersey corridor boasts an eclectic mix of urban-core and fringe-city submarkets as well as vibrant outer-suburb municipalities. Furthermore, the apartment-housing mix is just as diverse, ranging from pre-1970s-era garden apartments to Class A new construction.
“In particular, New Jersey has attracted an influx of former city dwellers seeking to relocate so they can have more square footage, be near outdoor spaces like parks and beaches and take full advantage of lifestyle services in the immediate and surrounding area – all at a cost savings,” said Uranowitz. “This migration is padding the tenant pipeline and will continue to do so as more companies adopt the work-from-home model over the long term – and perhaps even permanently. In terms of performance, overall occupancies are holding steady and rent payments are, for the most part, not significantly lagging – both good signs the trajectory will continue to inch upward throughout 2021 and beyond.”
Another positive sign of multifamily’s resiliency is the number of deals Gebroe-Hammer has in the pipeline that are slated for closing before year end. “This surge in deal-closing velocity mirrors fourth quarters of the recent past – when investors streamline their efforts to finalize deals before the start of the new year and sellers opt to take advantage of calendar-year tax benefits,” added Uranowitz.
A veteran of recessionary economic protractions in almost every decade since the mid-1970s, Uranowitz said that the tri-state region, as a whole, has historically trended with more stability as compared to their major metro counterparts nationwide. “Multifamily is repeating its own history, just as it did in the aftermath of the height of the Great Recession in early 2009 and every other downturn before that,” he said. “This level of endurance is at the very core of Gebroe-Hammer’s long-term success, which is tied to the sustainability of multifamily product, its ranking as commercial real estate’s top-performing investment class and its unique and seemingly endless tenant pipeline.”
Since 1975, Gebroe-Hammer’s brokerage activities have concentrated on all multifamily types including Class A, B and C high-rise and garden-apartment properties. While initially focusing on New Jersey, the Livingston, N.J.-based firm has evolved during the past 45 years to also dominate Eastern Pennsylvania and New York State submarkets as well as represent client interests nationally. Widely recognized for its consistent sales performance, the firm is a 16-time CoStar Power Broker and is credited with arranging the largest portfolio sale in 2019 for the MidAtlantic Region and in New Jersey