Gebroe-Hammer Associates Inks A Record 33 Deals Exceeding $120 Million In Sales In First Half Of 2010

Volume Indicates Multi-Family Investments Have Rebounded. End Quote

Newark, NJ (1888PressRelease) August 06, 2010 - Multi-family trading throughout Northern New Jersey was robust in the first half of this year, indicating this segment of the commercial real estate industry has rebounded as investors and owners have stepped off the sidelines throughout the region, reports Gebroe-Hammer Associates. The Livingston, N.J.-based firm, which specializes in the sale of multi-family, retail and commercial properties, led the market with more than 33 transactions that exceeded $120 million and involved a total of 1,889 units.

In the first half of 2010, Gebroe-Hammer recorded the first major multi-family transaction of the year with the $19 million sale of 251 units at Baldwin Oaks, one of the area's premier senior retirement rental communities for those age 62 and older. The Parsippany, N.J., community and the 50-unit sale of Pluckemin Park, a garden apartment complex in Bedminster Township, are among the several age- and income-restricted multi-family investment sales closed by Gebroe-Hammer during the past few months.

"Multi-family investing has gained even greater velocity in the past six months because investors, who circled the wagons at the height of the recession, finally realized that the expected bloodbath and price plunge never materialized," said Ken Uranowitz, Gebroe-Hammer's managing director. "Investors want to take advantage of low interest rates and don't want to miscalculate the next uptick in the economic cycle."

Uranowitz also noted that from a property owner's perspective, looming increases in interest rates and the Capital Gains tax are a strong catalyst for selling at this time. With the residential home sale market still in the doldrums, in-place renters who were once potential homebuyers are staying put and rising foreclosures are creating additional rental demand, firming up occupancy rates. "When combined, all of these factors add up to an increasingly strong, stable investment asset class, which is why multi-family properties have always endured tough economic cycles," he said.

Private Individual Investors Dominate N.J. Urban Markets

New Jersey is a unique marketplace, unlike any other in the country, in terms of multi-family dynamics. According to Gebroe-Hammer, the majority of property ownership is held by private individuals and/or families for many years who continue to grow their portfolios from generation to generation. Many of the large urban areas throughout the state have very few single-family neighborhoods. Most feature city blocks lined with low-to-mid-rise apartment buildings. Uranowitz added, "The proximity of these cities to major metropolitan centers like New York City supports a strong tenant pool at rents far below what these markets are commanding."

While the number of single-deal transactions exceeding $15 million have been limited to only a handful, small-to-mid-sized properties in New Jersey's most densely populated areas are in short supply and high demand. Throughout the Hudson/Essex/Union County corridor, Gebroe-Hammer closed a total of 23 deals exceeding $47.535 million. Located in Bayonne, Elizabeth, Irvington, Jersey City, Newark, North Bergen, the Oranges, Union City and Weehawken, the properties ranged in size from 11 units to 81 units.

"The existing stock of Class-B and even Class-C properties has always been, and continues to be, the multi-family investment engine since this class type is usually held for a shorter period of time - resulting in an increased amount of trades. These types of buildings can offer value-add repositioning opportunities through upgrades and refurbishments," said Uranowitz. "In contrast, Class-A properties in high barrier locations, where few properties are ever marketed for sale or sold, are aggressively being pursued by equity funds and other institutional investors offering cap rates at levels that were paid just a few years ago at the height of the real estate boom."

Although the multi-family housing market weathered the latest economic downturn better than its commercial office and industrial counterparts, there has been an influx of distressed debt opportunities in the past six months. Between March and June, Gebroe-Hammer negotiated seven note sales for 761 units totaling $48.9 million on behalf of several major banks.

Gebroe-Hammer is the region's dominant commercial real estate investment brokerage firm specializing in the sale of multi-family, retail and commercial properties throughout New Jersey; New York; and Pennsylvania, including Philadelphia. Established in 1975 by iconic founders Mel Gebroe and the late Morris Hammer, the firm has earned the CoStar PowerBroker designation for the past seven years and has been acknowledged by numerous industry publications for its creativity in structuring traditional and complex transactions, including those that involve government agencies.

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