Imperial House Apartments at 750 North Broad St. in Elizabeth sold for $21.3 million in 2021, in a deal arranged by Gebroe-Hammer Associates. — Courtesy: Gebroe-Hammer
By Joshua Burd
Gebroe-Hammer Associates is eyeing continued momentum in 2022 after a year in which it brokered the sale of nearly 13,000 apartments, inking some $2 billion in transaction volume.
The firm, which is based in Livingston, said it recorded 124 transactions in 2021. That translated to $2.02 billion in value, eclipsing the company’s previous high watermark of $1.9 billion from 2019.
The 12,804 units that Gebroe-Hammer sold last year included 59 commercial units and land sales in Monmouth and Warren counties, according to a news release. In December alone, the firm completed 22 deals encompassing 3,462 units sold for a transaction value of $574 million.
“As Gebroe-Hammer Associates continues its focus on multifamily investment sales, our firm has once again established the gold standard in this niche area of specialization,” said Ken Uranowitz, the firm’s president, who has spent his entire 46-year career with Gebroe-Hammer. “Apartment-property investments experienced a tremendous pandemic-recovery bounce due to pent-up demand and an abundance of dry powder that went undeployed in 2020. These conditions were compounded by an anticipated capital gains tax increase and elimination of the 1031 exchange, which both now seem unlikely going forward.
“The next 12 months are expected to bring much of the same, in terms of the multifamily investment frenzy,” he added. “Continued deal flow and capital velocity will feed record demand, especially among private and institutional investors, funds and lenders.”
Gebroe-Hammer’s highest concentration of sales in 2021 came in New Jersey’s urban and suburban submarkets as well as the South Jersey and greater Philadelphia region, the news release said. Its highlights and total sales by county in North Jersey included:
- Essex County: $317.37 million in sales comprising 2,137 units, including the $113 million sale of an East Orange workforce housing portfolio
- Union County: $217.67 million in sales involving 1,362 units, which included the $82.72 million trade of a mixed-use portfolio spanning three municipalities
- Hudson County: $170.79 million in sales across 861 units, among which was a roughly 200-unit apartment property fronting John F. Kennedy Boulevard East
- Morris, Sussex and Warren counties: $89.94 million in sales comprising 428 units, including the trade of a garden-style property with more than 200 units that sold for over $50 million
- Bergen and Passaic counties: $52.36 million in sales involving 311 units, including the $22.75 million trade of a 118-unit high-rise
“Gateway markets — cities and high-building, high-population-density train line suburbs — created a sustained shortage of available for-sale product in what has become known as ‘transit villages,’ which continue to be investment magnets,” said David Oropeza, an executive managing director with the firm.
Gebroe-Hammer’s central New Jersey activity included:
- Mercer County: $80.43 million in volume across 258 units, including the sale of a new-construction luxury apartment complex for more than $65 million
- Middlesex County: $240.18 million in sales across 949 units, including that of a complex of more than 500 units that fetched $150 million
- Monmouth and Ocean counties: $86.15 million in deal activity involving 383 units, including a 300-unit garden apartment property that sold for more than $70 million
- Somerset County: $34.99 million in sales comprising 151 units, with a prominent garden-apartment community recording a price of more than $248,000 per unit
Gebroe-Hammer on Tuesday also highlighted deal totals of 2,194 units for $294.73 million in Atlantic and Camden counties and 324 units for $54.1 million in Burlington County, among its activity in South Jersey and greater Philadelphia. Additionally, its 2021 deals included trades involving 2,906 units in the Philadelphia and Mid-Atlantic region for a combined $317.34 million and 540 units in New York State for a combined $62.29 million.
The firm, meantime, pointed to the prospect of a new generation entering the tenant pipeline.
“While the millennial cohort may have migrated to edge-city suburban markets during the pandemic in search of more space for their growing families, the first wave of Gen Z graduated college, secured high-paying remote-to-hybrid jobs and built up their savings while living with their parents during the pandemic,” Executive Managing Director Joseph Brecher said. “Now that society is opening up, they are flooding the tenant pool to bridge already low vacancies in most Northeastern submarkets.”
Uranowitz said he expects cap rate compression levels to continue into 2022, notwithstanding an anticipated rise in interest rates in the coming months, while single-family homeownership remains elusive to many.
“As borrowing costs become more expensive, renters will stay in place to solidify occupancy levels — resulting in the continued upward trajectory of multifamily performance in the foreseeable future,” he said.