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(Read more on the multifamily market.)

EAST RUTHERFORD, NJ-Home sales are dicey and the mortgage business is a mess, and that may be a good thing for the rental apartment sector. Indeed, most signs point to a steady performance, both from the viewpoint of developers–if they can get the necessary approvals–and those interested in investing in existing properties.

“All indicators remain encouraging at mid-year, with robust rent increases, strong capital flows and healthy job growth,” says Jose Cruz, senior director in Cushman & Wakefield’s Metropolitan Area Capital Markets Group, based here. “And in a continuing trend, the market is benefiting significantly from the strong economic environment in neighboring Manhattan.

“Overall rental property occupancy rates remain favorably high, currently at 96% on average, with recent sales indicating properties trading at 99% occupancy,” Cruz says. “Many market participants are reporting the ability to raise rents in the high single digits with no adverse effect on occupancy. Concessions have disappeared for class A properties.”

Michael Fasano, regional manager for Marcus & Millichap in Elmwood Park, adds that, “Investors continue to demonstrate their preference for apartment properties in Northern New Jersey. Deal flow has picked up recently, and should remain at a healthy level in the months ahead.”

New Jersey continues to be one of the most desirable investment markets for rental product explains Woodbridge-based Kislak Co.’s Barry Waisbrod. Among recent deals he’s orchestrated were the sale of Watchung Gardens in Plainfield, which traded for $7.5 million, or about $74,000 per unit; and the $3.8-million sale of 801 Lexington Ave. in Lakewood ($95,000 per unit). Both were fully occupied when the deals closed.

“Many long-time owners are coming out of the woodwork wanting to sell their multifamily investments,” says Kislak’s Robert Squires, who recently sold the Crystal Apartments in Rutherford for $115,000 per unit. “In that transaction, the owner decided that now is the best time to take advantage of strong market conditions and high demand.”

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