Page 17 - RE-NJ March 2022

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exceed 2021,” said Gambuzza, whose team through late February had
have decided that their properties are not going to be passed to the next generation. “Some of these sellers are transitioning to other markets or other asset types — reshuffling the deck, so to speak.”
Gambuzza said that some buyers have found quick success in reselling properties they bought after holding them for just one year.
“In particular, this strategy worked well for those who purchased real estate during the ‘gray,’ or unknown period in the beginning of the pandemic,” he said. “No one could
anticipate what would happen with rents. Some were expecting that the majority of renters would stop paying rent. The opposite happened. Rents have grown so quickly from that period. That coupled with increased demand from buyers compressed cap rates and further proved the resiliency of multifamily investments.”
He said the Hudson County market is recovering well after it saw “so many” people leave the area for the suburbs.
“We are seeing demand return to urban markets where some prefer the urban amenities,” he said. “We aren’t
seeing any softness in the market right now. Both urban and suburban are seeing little vacancy now and rents are rising. New product is all being absorbed briskly.”
Gambuzza said supply chain challenges are delaying some projects.
“Appliances and other materials have been a challenge to obtain,” he said. “Some owners who can get them
are stockpiling them for when they need them. Others are ‘settling’ for appliances in alt-brands or styles if the product they want isn’t available when needed.” RE
Nat Gambuzza
inked more than $102 million in transactions in 2022. “Class B and C properties are in the highest demand due to their affordability from renters
and their ability to create the most amount of value through renovations.”
“Most buyers prefer a value-add strategy which typically points
them to older buildings that can be purchased, renovated, have their rents increased and then be resold for greater profit,” he said.
Gambuzza said that Class A properties have higher rents and
are generally limited in their ability to grow. They appeal to buyers seeking capital preservation and 1031 exchanges. That has left many investors clamoring for New Jersey’s older apartments, which Uranowitz said remain “the backbone of the state’s residential housing stock.”
“Specifically, North and Central Jersey’s high-population-density municipalities remain reliant upon these types of apartment properties to house today’s
workforce
tenants — from
police and
fire personnel
and restaurant
staff, sales
and service,
administrative
and tech-
support workers to post-bachelor’s career starters,” Uranowitz said. “For this reason, Class B and C apartment assets are at the top of investor checklists thanks to their inherent value-add (and) property repositioning opportunities.”
Gambuzza said, as for financing deals, in early 2021, lenders were requiring holdbacks and escrows as security for nonpaying occupants, which is
no longer required: “The lending space now is ‘more normal,’ and no one is overly concerned about rent collections due to the lack of vacancy and the increased rents.”
He said older, longer-term property owners are still looking to sell if the price is right – at least those who
Ken Uranowitz