BOGOTA, NJ—Landmark Development Company has sold a 48-unit multifamily property it originally developed in 1962 in Bogota, NJ. Landmark sold the garden-style apartment project to Real Estate Growth Advisors for a competitive 4.8 percent cap rate and a total price of $6.725 million.
“REGA plans to execute a significant repositioning strategy in order to take advantage of the strong location and quality of the underlying asset,” says REGA principal Jason Bilanin.
Hasbrouck Heights-based Redwood Realty Advisors handled the transaction.
“This transaction signifies continued buyer demand for older work force stock,” Thomas McConnell, CCIM, managing partner at Redwood Realty tells GlobeSt.com exclusively. “The project traded at a sub 5 cap which proves the appetite for older product is alive and well. As long as there is upside in rents you will see compressed cap rates in the short to midterm.”
McConnell sees two main concerns on the 2016 horizon in the multifamily market: rising property taxes in New Jersey that will lower the NOI on deals, and the possibility that the bullish outlook for the multifamily asset class will lead to overbuilding in some markets.
“It appears the majority of “renters by choice” want to live in urban markets with easy access to mass transit,” he says. “I believe developers will begin to build smaller units to keep the units affordable.”
In addition to McConnell and Kevin McCrann, Redwood’s other managing partner, the Redwood team on the transaction included Michael Scrima and Matthew Sandelands, investment associates.