The Real Deal Tristate

Amid NY rent reforms, NJ brokerage touts opportunities across the Hudson

Gebroe-Hammer Associates, having closed $820 million in first half multifamily sales, believes investors will flock to the Garden State
By Mario Marroquin | July 16, 2019 01:30PM

Gebroe-Hammer president Ken Uranowitz and the Jersey City skyline (Dan DeLuca/Flickr).

A month after handling the $59 million sale of a 232-unit portfolio in Union County, New Jersey, local brokerage Gebroe-Hammer Associates announced this week that it had closed $820 million in first half multifamily sales.

The Livingston-based firm said in a statement that is has outpaced its peers both regionally and nationally due to the strength of the Garden State’s multifamily sector, one that it believes is poised for even more growth as a result of rent reforms roiling neighboring New York.

“With the recent passing of onerous rent control legislation in New York, we expect to see an onslaught of investor demand in New Jersey shifting from across the Hudson River to out-commuter-dense submarkets,” said Gebroe-Hammer president Ken Uranowitz in prepared remarks, which were picked up by GlobeSt and ROI-NJ. “In turn, this will create an even wider delta where there is an already constrained demand-supply imbalance, which will intensify pricing pressure and deepen cap-rate compression.”

Uranowitz added that the Federal Reserve’s anticipated interest rate cuts “just adds more fuel to this fire.”

Citing data from real estate analytics firm REIS, Uranowitz and Gebroe-Hammer pointed to a reduction in product delivery during 2020 and 2021 that is likely to drive higher rents as apartment occupancies increase during that same time period.

REIS, acquired last year by Moody’s, noted on July 1 that the Central New Jersey submarket had the weakest rent growth during the second quarter at 0.3 percent, alongside Cleveland. The same region had 1.9 percent growth in effective rents for the year. REIS also reported a rise in New York City vacancies of 3 basis points, to 4.5 percent.

For its part, Gebroe-Hammer said that it had sold 5,675 units across 65 deals arranged on behalf of private equity firms, private individuals and institutional investors in New Jersey and the greater Philadelphia area during the first half of 2019.

The firm’s biggest deal was the $75 million trade in February of a 487-unit multifamily portfolio in Bergen and Hudson counties on behalf of seller Madison Hill Properties.

The Real Deal also noted Gebroe-Hammer’s role this year handling the $16.6 million sale of a 134-unit multifamily complex in Wantagh Township and the $17.9 million sale of a 168-unit apartment complex in Newton.