The Real Deal Tristate

Who needs New York? Garden State multifamily portfolio trades for $146M

In the aftermath of changes to the Empire State's rent laws, multimillion-dollar multifamily deals are heating up in nearby Northern New Jersey
By Mario Marroquin | July 30, 2019 07:00PM

Roseland-based Murnick Property Group has sold a 1,000-unit, seven-property multifamily portfolio in a deal brokered by CBRE vice chairman Jeffrey Dunne (inset).

A seven-property multifamily portfolio in Northern New Jersey has been sold to an unnamed international investor for $146 million.

CBRE vice chairman Jeffrey Dunne, who brokered the deal on behalf of Roseland-based Murnick Property Group, told The Real Deal that the transaction closed Tuesday and attracted more than 33 offers.

Dunne noted that Class B suburban apartment buildings are beginning to garner interest from New York investors in light of recent rent reforms that have roiled New York’s commercial real estate industry. On Tuesday, Ron Moelis’ L+M Development Partners and Invesco partnered up to purchase a 2,800-unit portion of New York’s Putnam Portfolio from Brookfield Asset Management and Urban America in a $1.2 billion deal.

Some Garden State-based brokerage firms have touted the regulatory changes in New York as heralding a new era for multifamily investment in New Jersey.

The former Murnick properties, most of which were built in the 1950s and 1960s, are located in Asbury Park, East Orange, Newark and Trenton. CBRE, which procured the unidentified buyer, said the portfolio is comprised of 1,035 units with an average annual rental growth of 4.1 percent.

“Murnick’s timing in this sale is opportunistic, as the market demand for this type of property is as strong as we have experienced, though the purchaser will do well with the purchase as renter demand for well-maintained Class B apartments is also at historic levels and expected to continue for years ahead,” said a statement from Dunne announcing the deal. “Well-capitalized, experienced operators are aggressively pursuing and stretching on price to acquire Class B apartments in good, established markets.”

A total of 661 units were traded by Murnick in East Orange across four separate assets: Ambassador House, Executive House, Munn Heritage and Washington Towers. In Asbury Park, Murnick sold the 261-unit Munroe Towers. Murnick also unloaded the 24-unit Parkview Gardens in Newark and 89-unit Lafayette House in Trenton.

In addition to Dunne, CBRE’s Gene Pride, Eric Apfel, Nat Gambuzza, John Veniero and John McFadden advised Murnick on the divestiture. Earlier this month the brokerage hired Sam Zell — not to be confused with the real estate mogul of the same name — to bolster its multifamily expertise in Philadelphia.

TRD recently noted that CBRE arranged $57 million in financing for Newark-based OneWall Partners to recapitalize eight properties in East Orange. Last week a Dunne-led CBRE team represented New York-based Midwood Investment & Development in the $30 million sale of a 16,000-square-foot retail building in Greenwich, Connecticut, which is leased for the next 17 years to a CVS store.

GlobeSt reported Tuesday on the $24.5 million off-market sale of a three-property multifamily portfolio in South Jersey to the King of Prussia, Pennsylvania-based Westover Companies.