Murnick Property Group has sold a portfolio that includes garden and high-rise apartment properties in East Orange, Asbury Park and Trenton — Courtesy: CBRE
By Joshua Burd
A longtime New Jersey apartment owner has reaped $146 million from the sale of seven properties in Essex, Monmouth and Mercer counties, brokers with CBRE said Tuesday.
The real estate services firm announced that it represented Murnick Property Group in the sale of the 1,035-unit workforce housing portfolio, which includes both high-rise and garden apartment properties. An international investor acquired the portfolio, beating out more than 30 other prospective buyers.
The CBRE team of Jeffrey Dunne, Gene Pride and Eric Apfel, along with Nat Gambuzza, John Veniero and John McFadden completed the assignment and procured the buyer.
“We are pleased to have represented Murnick Property Group in the sale of these seven assets,” Dunne said. “Over 50 plus years, the seller assembled a portfolio of well-built, transit-centric, high-rise communities with an operational philosophy of maintaining the buildings to preserve their value. The Murnicks’ 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.”
The portfolio includes:
- Washington Towers in East Orange (197 units, 14 stories, built in 1964)
- Executive House in East Orange (228 units, 23 stories, built in 1965)
- Ambassador Towers in East Orange (161 units, nine stories, built in 1958)
- Munn Heritage in East Orange (75 units, seven stories, built in 1913)
- Parkview Gardens in Newark (24 units, four stories, built in 1947)
- Munroe Towers in Asbury Park (261 units, 15 stories, built in 1965)
- Lafayette House in Trenton (89 units, 12 stories, built in 1966)
CBRE touted the portfolio as being “meticulously maintained” with high occupancy, 4.1 percent average annual rent growth since 2014 and high resident retention. As workforce housing, the properties provide housing at a significant discount to the cost of renting at a newer building in their respective submarkets.
The buyer now plans to drive rent growth by focusing on enhancements and upgrades to unit and common area finishes, CBRE said
“This is a scenario that we are seeing play out over and over in New Jersey and the greater New York suburban markets,” Dunne added. “Well-capitalized, experienced operators are aggressively pursuing and stretching on price to acquire Class B apartments in good, established markets. This is due to strong rent growth, natural supply constraints and value-add potential. It’s impossible to build new apartments that will be comparable in rental rate to older Class B assets, which insulates these communities from new competition, thus enabling rents to grow as more renters enter the market.”