The Investor - Gebroe

T
H
E
INVESTOR
GEBROE-HAMMER ASSOCIATES
DECEMBER 2008
Gebroe-Hammer Building 2 West Northfield Road Livingston, NJ 07039 973-994-4500
Multi-Family Housing Investments Thrive in Current Economy
High Occupancy Rates and Opportunities to Leverage Rent Appreciation Expected to Drive Demand into 2009
M
ulti-family housing investments are
surging throughout the northeast,
despite the volatility of the stock
market and global economy. Investors recognize
the two-fold benefit associated with adding multifamily housing properties to their portfoliopeople always need a place to live, especially at a
time when the foreclosure rate is at an all-time
high, and owners possess the unique ability to
control the asset's performance through capital
improvements and rent appreciation.
Ken Uranowitz (left), Managing Director, and
Mel Gebroe, Chairman and Co-founder
High occupancy rates across all property class
categories are a major lure for investors seeking
to enhance their net operating income. The
urban markets continue to experience high levels
of trading activity while once high-barrier-toentry suburban areas, where existing properties
have traditionally remained family-owned for
generations, are becoming more active than ever
before.
“As the region's leading real estate brokerage
firm for more than 33 years, Gebroe-Hammer
Associates has helped clients navigate the multifamily housing investment market throughout
many different economic periods,” noted Mel
Gebroe, co-founder and chairman. “While the
current climate does not favor investment in
other real estate classes, apartment-rental multifamily housing has been propelled to the
forefront in terms of demand.”
Gebroe-Hammer specializes in the sale of
multi-family properties and is active throughout
N e w J e r s e y ; Pe n n s y l v a n i a , i n c l u d i n g
Philadelphia; and New York. Clients include
private owners, REITS, private equity firms and
other institutional investors.
In addition to existing properties, first-class
multi-family housing properties are in demand
among investors seeking high-quality buildings
in well-established neighborhoods. During a
recent four-month period in Philadelphia,
Gebroe-Hammer negotiated the disposition of
more than 395 units for a combined total of
$42.85 million in sales. The latest transaction,
Pastorious Court Apartments, is highlighted on
Page 2.
Another hotbed of activity is New Jersey's
Gold Coast region, where the firm recorded
more than $40 million in sales in recent
months. In Newark, the largest transaction
involved a multi-family portfolio comprised of
eight buildings, which sold for $14 million,
while notable deals were also closed in
surrounding cities (see Page 2 for highlights).
Demand for suburban multi-family properties
also is surging and investment activity is on the
rise in rural markets as well (see Page 3).
“Current market conditions are extremely
favorable for first-time and experienced buyers,
many of whom are well-financed or choose to
exercise the 1031 Exchange,” said Ken
Uranowitz, managing director. “Owners also
are leveraging today's market, which is
characterized by considerable inventory
undersupply, by maximizing the return on their
original investment through aggressive pricing.
These conditions are advantageous to owners
and investors.”
Gebroe-Hammer Closes $23.55 Million Sale
of Luxury Hi-Rise in Hackensack, NJ
Prominent 128-Unit Complex Sells in Off-Market Transaction
Gebroe-Hammer Associates has orchestrated the $23.55 million trade of The Carlyle, a prominent luxury
hi-rise apartment building in the heart of Hackensack, N.J. The brokerage team of Ken Uranowitz, managing
director; Greg Pine, vice president; and Steven Follman, sales associate; represented the seller, Hekemian &
Co., and procured the buyer, a private New Jersey-based investment group.
“The Carlyle is at the center of Hackensack's finest residential neighborhood and has earned a reputation
for providing superior apartment-style living in close proximity to New York City,” said Uranowitz. “It is rare
that a property of this caliber comes to market in Bergen County, where multi-family housing product is
being acquired at an unprecedented pace.”
Located at 380 Prospect Ave., The Carlyle is a celebrated fixture on this prestigious thoroughfare featuring
a mix of single-family, mid-rise and hi-rise residential buildings, commercial and medical offices and the
renowned Hackensack University Medical Center.
Built in the 1970s, the 13-story building features an exterior brick façade with 128 units offering central air
conditioning and hardwood flooring. Many apartments have spacious outdoor balconies, which are ideal for
The Carlyle, Hackensack, NJ
entertaining or relaxing. Building amenities include laundry facilities, 24-hour doorman service, a swimming
pool and on-site parking in a 136-car underground garage or 64-space outdoor lot. The area's quaint cafés, award-winning restaurants and retail shops are
within walking distance or a short drive.
“The sale of The Carlyle coincides with a market inundated by seasoned and first-time investors at a time when supply of multi-family housing product in
all class categories is extremely limited,” added Uranowitz.
Gebroe-Hammer 973-994-4500
Suburban Market Focus
Somerset County: 97-Unit Towne Oaks
Sells for $8.778 Million
Sussex County:
Rural Markets Attract
Renters and Investors
Town Square Garden, Newton, NJ
Town Square Garden, a 42-unit, Class-A apartment
complex located at 54 Mill St. in Newton, has sold for
$3.675 million. Sales Associates Stephen Tragash and
Elliot Schechter represented the seller and procured
the buyer.
“This transaction demonstrates the emergence of
investment demand for rural multi-family product,”
explained Tragash. “Tight supply and high demand
have prompted a 'spillover' effect that extends beyond
urban and suburban areas to northwestern New
Jersey.”
The two-story Town Square Garden features a
stucco exterior façade and a mix of one-, two- and
three-bedroom units. The area is served by Route 206
as well as CR-519. New York City and Trenton are
located approximately 60 and 70 miles away,
respectively.
Mercer County: Hamilton
Township Mid-Rise
Fetches $3.6 Million
Towne Oaks, South Bound Brook, NJ
Joseph Brecher, senior vice president, negotiated the $8.778 million trade of Towne Oaks, a
97-unit complex located at 159 Main St., in South Bound Brook, N.J.
“South Bound Brook is undergoing a comprehensive redevelopment effort that has
attracted an influx of New York City commuters seeking rental apartments in this
picturesque, sprawling suburban setting,” said Brecher.
Towne Oaks offers a serene park-like setting in South Bound Brook just 10 minutes from
New Brunswick. Each studio, one- and two-bedroom unit features an outdoor
balcony/deck/patio as well as walk-in closets and hardwood flooring complemented by plush
carpeting.
Bergen County: Palisades and Cliffside Park
Transactions Exceed $5.23 Million
White Horse Gardens, Hamilton Township, NJ
The $3.6 million sale of White Horse Gardens, a 48unit mid-rise apartment complex, was negotiated by
Sales Associates Steven Follman and Elliot
Schechter, along with Joel Schwartz, executive vice
president. The Gebroe-Hammer brokerage team
represented the seller and procured the buyer, both of
whom are long-time private investment clients.
Located at 60-66 White Horse Pike, each of the
three well-maintained three-story buildings features
an all-brick façade with a total of 12 one-bedroom
units and 36 two-bedroom apartments. The property
was 95 percent occupied at the time of sale.
As New Jersey's eighth-largest municipality,
Hamilton Township is next to Trenton and less than
an hour ride from New York, Philadelphia and the
Jersey shore.
“This suburban locale has become quite popular
among apartment renters who are commuting within
New Jersey as well as to New York and Philadelphia,”
added Schwartz. “Demand has strengthened area
occupancy rates, which are a leading driver for
investment interest and activity.”
This northeast county,
which rivals Hudson and
Essex for the highest
concentration of multifamily housing properties,
continues to record
significant apartmentbuilding investment activity.
Gebroe-Hammer recently
closed two transactions
totaling more than $5.23
million in Palisades Park and
Cliffside Park, N.J.
Avi Oren, vice president,
and Elliot Schechter, sales
associate, handled the $4.2
million sale of 319 Palisade
Ave., a 19-unit upscale midrise building featuring one-,
two- and three-bedroom
layouts in Cliffside Park.
319 Palisade Avenue, Cliffside Park, NJ
The four-story, 15-year-old
stucco property is in excellent condition and fully occupied.
“This upscale property is just minutes from the George Washington Bridge, strategically
located between Fort Lee and Edgewater,” said Schechter. “Location, proximity to mass
transit and property condition are all key drivers for investors.”
At 201 E. Ruby Ave. in Palisades Park, Schechter procured the buyer, a local investor, who
acquired the well-maintained all-brick three-story building for $1.23 million. Uranowitz had
originally sold the property to the seller, Ruby Avenue Associates LLC, in 2002. According to
Schechter, the buyer was attracted to the size and location of the 14-unit property and plans
to upgrade units as they become available.
Gebroe-Hammer 973-994-4500
Urban Market Focus
Gebroe-Hammer Closes $40+Million in Sales
Along NJ’s Gold Coast
High concentrations of multi-family housing properties continue to trade throughout New Jersey's northeastern counties of Essex, Union and Hudson,
according to Gebroe-Hammer Associates, which orchestrated 11 noteworthy deals exceeding $40 million. The transactions involved more than 425 units
throughout the tri-county region.
“Each of these counties serves as an extension of Manhattan, where New Jersey commuters establish their place of residence to get more space for less
rent as compared to across the Hudson River,” noted Ken Uranowitz, the firm's managing director. “As a result, vacancy rates are low, and investors are
aggressively pursuing multi-family investments in the cities as well as suburbs.”
Essex County: Newark, Montclair, East Orange
and Irvington Sales Surpass $18.125 Million
Union County: Plainfield &
Rahway Properties Net More
than $10.5 Million
In Newark, Gebroe-Hammer brokered
the sale of a Newark multi-family
portfolio including eight buildings that
cover a full city block between 624 and
784 Martin Luther King Blvd. TreeTop
Development acquired the rental
properties, which sit between
University Heights and the city's
Lincoln Park Arts District, from a
private investor based in Lakewood,
N.J., for $14 million.
David Oropeza, executive vice
president, and David Jarvis, senior vice
president, headed the brokerage team
for the transaction. The mid-rise and
walk-up buildings feature brick
exteriors and 256 one-, two- and threebedroom units; one includes ground624 Martin Luther King Blvd, Newark, NJ
floor retail. TreeTop Development plans
to invest substantial capital in apartment and common area upgrades, including renovated
kitchens, baths and landscaping. Currently, the portfolio has an 85 percent occupancy rate.
During the past five years, Gebroe-Hammer has represented the seller in the sale of its
entire New Jersey 600-unit portfolio. The Newark buildings represented the last Garden
State assets for this investor, who has refocused on the Midwestern U.S. market.
Uranowitz and Jarvis also handled the $2.35 million sale of 31 The Crescent in Montclair,
N.J., a 14-unit mid-rise luxury building, while Oropeza represented the buyer and seller in the
$1.05 million sale of 116 Lenox Ave. in East Orange. In addition, the brokerage team of Jarvis
and Elliot Schechter, sales associate, closed the $725,000 sale of 37 40th St. in Irvington, a
fully occupied 11-unit garden apartment complex.
In the southwestern part of the county, Gebroe-
Philadelphia: Pastorious Court
Apartments Sells for $3.6 Million
Pastorious Court Apartments, a 42-unit mid-rise apartment complex in the prestigious West
Mount Airy neighborhood, has sold for $3.6 million. Eli Rosen, vice president, represented
the seller, Pastorious Court LP, and procured the buyer, PC Apartments, LP.
“Well-maintained rental properties in excellent condition like Pastorious Court are
especially appealing to investors because vacancy rates are low, the tenant base is comprised
of young professionals and there is strong rent appreciation potential,” said Rosen.
According to Gebroe-Hammer, vacancy
rates are above 95 percent, and average
monthly rents range from $700 to $1,200.
“This sale was quite impressive because of its
$85,000 per-unit price, which is a record for
this area and reflects the strength of the
rental market. Apartments in this
neighborhood are in high demand and
considered to be one of the best in the city,”
added Rosen.
Located at 6600 Lincoln Dr. in northwest
Philadelphia, the four-story complex
features an all-brick façade and a mix of
one-, two- and three-bedroom layouts. Fully
occupied at the time of sale, the new owner
Pastorious Ct., Philadelphia, Pa.
is planning to implement several upgrades.
Hammer handled the disposition of 141 units for
$10.5 million in two separate transactions in Plainfield.
Steven Tenenbaum, assistant vice president, and
Joseph Brecher, senior vice president, handled the
$8.1 million sale of the Netherwood, a 108-unit
complex located at 825 E. Front St.
The brokerage team of Tenenbaum and Alan
Lieberman, vice president, also handled the $2.4
million sale of a 33-unit, three-story building at 715725 Arlington Ave..
In nearby Rahway, Tenenbaum, along with Avi
Oren, vice president, also spearheaded the $1.712
million sale of 132-134 Elm St., a 16-unit property.
Hudson County: Commuter Hub
Records Sales Activity in
Excess of $7 Million
Strong market conditions also prevail in Hudson
County, where Gebroe-Hammer
recently negotiated
the sale of 28 units in Union City, for $2.260 million,
as well as the disposition of 41 units in West New York
for $2.8 million.
In Jersey City, the Gebroe-Hammer team of
Benjamin Greenstein, sales associate, and Jarvis
closed the $2.925 million sale of 205 Monticello Ave.
and 168-170 Clinton Ave. Greenstein also
represented the seller and buyer in the $1.9 million
sale of 169-171 Manhattan Ave., a 33-unit five-story
apartment building in the Jersey City Heights
neighborhood.
“The new owner plans to launch a comprehensive
renovation of each apartment to reposition the
property and elevate its class category,” added
Greenstein.
Passaic County: 18-Unit Complex
Trades for $1.475 Million
Aggressive pricing of apartment-rental properties that
come to market prevails in this county as
demonstrated by the $1.475 million sale of 122-132 N.
7th St., an 18-unit garden-apartment complex in
Paterson. Gebroe-Hammer represented the seller, a
private investor, and procured the buyer, 122-132
North 7th Street LLC.
“The seller, who owned the property for more than
25 years, realized a significant return at $82,000 per
unit,” according to Uranowitz, who noted the buyer is
an active owner of hundreds of units throughout the
city.
Located on the border of Haledon, N.J., 122-132 N.
7th St. is comprised of 14 one-bedroom units and four
two -bedroom units in a quiet residential
neighborhood. The two-story building offers
immediate access to NJ Transit bus routes as well as
Routes 20, 21, 46 and I-80, which serve the area.
Gebroe-Hammer 973-994-4500
Brecher Named Among Select
Group of Industry Leaders
Gebroe-Hammer's Joseph Brecher,
senior vice president, has been named
among the industry's most accomplished
brokers by two leading commercial real
estate publications. He was recently
cited as a “Broker All-Star” and “Top
Industry Leader” by Real Estate New
Jersey and MidAtlantic Real Estate
Journal, respectively.
Recognized for spearheading GebroeHammer's sales activity throughout
central New Jersey and Philadelphia,
Pa., Brecher is active in multi-family
housing sales throughout the East
Joseph Brecher, Sr. VP
Coast. Since joining the firm in 2001, he
has advanced through the ranks by brokering more than $1 billion in
multi-family housing sales. His industry experience and relationships
have been integral to several of Gebroe-Hammer's most noteworthy
transactions and are vital to its aggressive expansion into Philadelphia.
“Joseph Brecher has distinguished himself and Gebroe-Hammer
Associates by demonstrating a superior understanding of the multifamily housing industry, the importance of forging a trusted
client/broker relationship and how to structure a deal,” said Ken
Uranowitz, managing director. “His successes have been key to our
expansion and we are pleased he has been recognized as among the elite,
which transcends all of the commercial real estate specialty areas.”
As a consistent top producer, Brecher is the recipient of four of the
firm's most prestigious awards and an acknowledged multi-family
housing property expert. He was recognized for orchestrating more than
13 deals exceeding $250 million.
Two Monmouth County Sales Net
More than $25 Million
Multi-family housing has gained momentum as one of the most in-demand
commercial real estate class investments in Monmouth County, according
to Gebroe-Hammer Associates. The firm recently orchestrated two
separate transactions involving the sale of 138 units for a total of more
than $25 million in Long Branch and Red Bank, N.J.
The properties include Lloyd Manor, a 70-unit garden apartment
complex in Long Branch, and Colony House, a 68-unit hi-rise apartment
building, in Red Bank. Steven Follman, area sales associate, represented
the seller and procured the buyer in both transactions.
Just four blocks from the beach in the prestigious West End district,
Lloyd Manor's two-story, 15-building complex features a total of 40 twoand 30 three-bedroom units. Planned upgrades to the 100 percentoccupied property at 376 West End Ave. include a new rental office and
exterior landscaping.
In nearby Red Bank, Colony House, which is located at 122 N. Riverside
Ave. on the Navesink River, is comprised of a mix of 6 studio, 22 one-, 35
two- and 2 three-bedroom units as well as 3 penthouses. The seven-floor
building features a brick façade
and spacious layouts.
“This transaction is quite
unique in that the seller, Colony
Realty Associates, exercised the
1031 Exchange to acquire a
larger property that reflects the
entity's current portfolio
holdings,” explained Follman.
Colony House was acquired by
Park Ridge, LLC, an investment
group with holdings in New
Yo r k , N e w J e r s e y a n d
Pennsylvania, from Colony
Realty, a private investment
group active throughout New
Jersey and New York.
Colony House, Red Bank, NJ
GEBROE HAMMER
A S S O C I A T E S
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INVESTMENT REAL ESTATE
2 West Northfield Road/ Livingston, NJ 07039
Email: [email protected]
Visit our website at www.gebroehammer.com
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