"This was a historic fourth quarter for our firm as themultifamily investment market rallied, clearly demonstrating thatapartment-rental buildings are far more resilient than any otherreal estate class, including office, retail and industrial," KenUranowitz, Gebroe-Hammer's managing director, tells GlobeSt.com."Based on these closings and current deals in the pipeline, weexpect this trading velocity to continue into 2010."

|

According to Uranowitz, multifamily investments are favored bylocal savings and loans and community banks, which have emerged asthe leading lenders in today's economy. This is primarily becauseapartment buildings are considered to be a less volatile investmentrisk due to the basic need for housing. In addition, the rentalpool remains consistently strong. Uranowitz adds that he has alsoseen buyers who do not require financing, opting instead for 1031exchange deals and plunking down all cash.

|

"For the past 12 to 18 months, potential first-time homebuyershave been rendered inactive by high rates of unemployment and alack of income stability. It will take some time for any noticeableimprovement, not just in real data, but more importantly, from apsychological vantage point," he says.

|

In the largest recent transaction, Gebroe-Hammer represented thebuyer, an unnamed long-time client, in the acquisition of twoluxury garden-apartment-rental communities in New York's mid-HudsonValley. The firm identified the well-maintained, amenity-richproperties and negotiated the sale of all 1,196 units.

|

In New Jersey, investors are targeting existingsmall-to-mid-sized properties in Bergen, Hudson, Essex and Unioncounties because of their consistently high occupancy rates andproximity to mass transit and large employment centers, includingNew York City, Newark and Jersey City.

|

"This area, from stable urban strongholds tohigh-barrier-to-entry suburban markets, is becoming more fertile interms of multifamily activity," Uranowitz tells GlobeSt.com. "Withnew construction of apartment units virtually non-existent, due toa dry pipeline of development financing as well as open spaceinitiatives, the supply of for-sale apartment buildings cannot keeppace with investor demand."

|

Market highlights include three separate transactions involvinga total of 179 units in the heart of Hackensack; Elizabeth, nearKean University; and Tuckerton, which is 18 miles north of AtlanticCity. The firm's brokerage professionals also orchestrated the$9.75 million trade of a nine-building, 144-unit portfolio inHudson County.

|

"In the first half of 2009, when the recession was really takinghold, there were a lot of buyers and sellers sitting on thesidelines not knowing what would happen in our specific market,"Uranowitz relates. "Would there be a bloodbath? Would we seetremendous foreclosures—people losing properties left and right?But by the second half of 2009, owners began to emerge from hidingand saw that the sector was, in fact, going to hold its own, andwill continue to stay steady. This is the reason there's been atremendous velocity of deals closing."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.