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29 transactions involve 4,041 units in Northeast Gebroe-Hammer Associates reports $490M in multifamily sales for Q1 2021
SPOTLIGHTS SPRING PREVIEW ISSUE HIGHLIGHTS Volume 33, Issue 4 April 16, 2021
IVINGSTON, NJ — Gebroe-Hammer As- sociates , a nationally ranked multifamily-focused investment brokerage firm, has reported $490M in sales for a total of 4,041 units at the close of Q1 2021. In total, the firm orchestrated 29 trans- actions on behalf of private equity funds, institutional investors, family offices and private individuals with local, regional, national and global interests. From January through March, Gebroe-Hammer’s sales spanned New Jersey and the South Jersey Metro/ Greater Philadelphia area. Ex- amples of the transaction spec- trum include 10 individual property sales across four East Essex County high-popula- tion-density urbanmunicipali- ties; two North Jersey Metro trades totaling $12.65M; three Central Jersey Metro closings involving 98 units; 12 separate South Jersey Metro deals; and two additional unnamed transactions. “Multifamily properties have established they are on firm footing during this COV - ID economic recovery with all L
economies – North and Central Jersey for example – continued to outperform other metros nationwide. Greater clarity yields heightened confidence and resulting closing activity.” Gebroe-Hammer’s market specialists report positive stabilization of occupancy rates and investment activity in submarkets with short-to- moderate commute times to major cities. Flexible work schedules and telecommut- ing have prompted tenants to cast a wider net geographi- cally, thus feeding the tenant pipeline. “The boundary for what was once considered a maxi- mum commute time/distance from one’s workplace has been blurred,” said executive managing director David Oropeza , a 35-year Gebroe- Hammer veteran, who over- sees the Essex County Region where Q1 sales were recorded in Newark, Irvington, Orange and East Orange. “We’re also seeing the gradual return of Gen Z’ers, who are dip- ping back into the urban- apartment tenant pool after returning home to their fami- lies. When COVID hit, they
wanted to be close to loved ones and a safety net. With confidence up, this cohort is eager to get back to their own lifestyle and abandon that of their parents.” Deeply entrenched within the region’s urban, suburban and tertiary markets, Gebroe- Hammer’s market special- ists also are reporting newer multifamily properties as well as value-add assets and work- force housing are at the top of investor checklists. “The wide delta between multifamily investment de- mand and for-sale product availability remains preva- lent, much like early last year and the months before that,” said executive manag- ing director Joseph Brecher , a 20-year Gebroe-Hammer veteran, who spearheads the firm’s sales activities throughout the Central and South Jersey Metros/Greater Philadelphia area. “Projec- tions indicate 2022 will mark a return to pre-pandemic multifamily fundamentals, notwithstanding the uncer- tainties surrounding future tax legislation and/or interest rates.” MAREJ excellent example. Despite being marketed quietly to a small group of qualified pur - chasers, we generated offers for the seller that were several million dollars higher than the direct offers he received prior to our engagement. This demonstrates the benefits of a transaction being profession- ally marketed pursuant to an exclusive listing. Additionally, the seller, who was the origi- nal developer of the property, appreciated our honest un- derwriting, which was based on realistic, yet aggressive expectations.” Gralla joined Kislak in 2011 and specializes in the sale of multifamily and other invest- ment properties in northern and central NJ. Joni Sweetwood joined Kis- lak in 1996 and is one of the firm’s all-time leading sales - people. MAREJ
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arrows pointing to 2021 as the year of strong occupancies and positive rent gains,” said Ken Uranowitz , president, who joined the firm at its inception 46 years ago. “Both of these conditions cast multifamily investments in an extremely favorable light, paving the way for considerable rent and property-value appreciation over the long term.” According to Uranowitz, multifamily’s rebound is rooted in several factors. “Investor demand has been sustained in the COVID-19 economy as compared to previous reces- sions,” he said. “While inves- tors and financial institutions may have waited for some clar- ity at the onset and height of the pandemic in 2020, certain 280-320 E. Main St., Rockaway, NJ was one of two North Metro Sales in Q1 2021.
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M&T Realty Capital Corp. appoints managing director
Sean Cullen
15-18A FINANCIAL DIGEST
WOODBRIDGE, NJ — The Kislak Company, Inc. announced the recent sale in northern and central New Jersey of the following multi- family properties and develop- ment sites: Kislak’s Gralla completes $49.2 million New Jersey sales million; - 8 units at 96 Eaton Place in East Orange for $1.1 million; and - 8 units at
OWNERS, DEVELOPERS & MANAGERS
82-88 Watc- h u n g A v e . i n N o r t h Plainfield for $800,000; Kislak mar- keted al l of the properties
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Directory ROP (Front Section) ........................................... Section A Contributing Columnist ............................ Chay Lapin, KPI Potential Pitfalls Of NNN Properties And A Savvy Alternative ...................................................................2A DELMARVA. ..............................................................3-5A Retail Development Reimagined . ............................ 9-12A People on the Move................................................... 14A Financial Digest ..................................................... 15-18A Owners, Developers & Managers .......................... 19-32A Business Card/Billboard Directory ............................IBC-A New Jersey.............................................................. 1-10B Pennsylvania........................................................11-BC-B Spring Preview ................................................... Section C www.marej.com
Julie Gralla
Somerset County Aerial
on an exclusive basis with VP Julie Gralla handling the first five assignments and executive VP Joni Sweetwood handling he last two. Gralla also pro- cured each purchaser. “The market for existing multifamily properties and multifamily development sites remains extremely strong in New Jersey, particularly in the northern and central parts of the state,” said Gralla. “The Somerset County sale is an
- over 130 units in Somerset County for $35 million; - a 1.39-acre development site at 1000 North Ave. in North Plainfield for $5.25 million; - 15 units at 532-538 East Front St. in Plainfield for $2.955 million; - a 1-acre unapproved devel- opment site at 100-112 Main St. in Orange for $2.9 million; - 16 units at 408-410 North 5th St. in Newark for $1.2
Inside Cover A — April 23 - May 20, 2021 — M id A tlantic Real Estate Journal
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M id A tlantic Real Estate Journal — April 23 - May 20, 2021 — 1A
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2A — April 23 - May 20, 2021 — M id A tlantic Real Estate Journal
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M id A tlantic Real Estate Journal
M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Editor/Graphic Artist ......................................Karen Vachon Contributing Columnist ....Chay Lapin, Kay Properties and Investments Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 33, Issue 4 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marej.com
By Chay Lapin
Potential Pitfalls Of NNN Properties And A Savvy Alternative ● NNN properties seem like passive investments but actu - ally require regular manage - ment. ● Overconcentration is a key risk when it comes to investing in NNN properties. ● DSTs (Delaware Statutory Trusts) provide an alternative way to invest in NNN proper - ties. ● Diversification and true passivity are unique advan - tages of DST investments. Frequently investors are seeking out reduced manage - ment and or passive real estate investments. Real estate own - ers are simply tired of the three T’s (Tenants, Trash, Toilets) and are looking for alternative options to consider. One option that a lot of inves - tors are being sold by their real estate brokers are Net Leased properties, which are common - ly known as “triple net leases” (or “NNN”). Some Net Lease properties can be nearly 100% passive. Investors will want to carefully understand how the
unique net lease is set up, as some leases may actually have active management responsi - bilities for building upkeep. A client will also want to keep a monthly check in to make sure that the tenant is abiding by their net lease structure and that they are actually paying the various bills (e.g. Com - mon area expenses, Property Taxes and Insurance). It is not uncommon for a large corpora - tion to have a glitch and be late paying property taxes, and this could affect your building if not caught in an appropriate time frame. If an investor is going to be placing their entire 1031 ex - change proceeds or cash alloca -
tion in one net lease property, there are key points that an investor should understand prior to investing: • Concentration Risk – Plac - ing all of your eggs into one basket • Tenant bankruptcies and restructuring – Lease Rejection • Store Closures – “Dark Stores” • 1031 exchange closing risk • Asset and property man - agement responsibilities – un - paid tenant taxes, collecting reimbursements, refinancing, lease term burn off and value erosion, lease renewal and negotiations, legal expenses, insurance issues, etc. continued on page 14A
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