Wednesday, October 23, 2019

Multifamily Continues to Flex its Muscles in Philly, NJ

by John Jordan
The multifamily sector throughout the greater Philadelphia region, as well as in North and Central New Jersey, is very strong with significant investment activity.

The firm reports that at the end of the third quarter it had arranged a total of 93 deals (year-to-date) involving 9,232 units sold for $1.38 billion.

“Investors—from private equity funds and institutional entities to private individuals and family offices—are upping their acquisition ‘game’ throughout the New Jersey, Greater Philadelphia and New York State metros as the end of the year draws closer.”

Investors are seeking multi-family properties primed for capital improvements and/or recently delivered new-construction properties that serve as neighborhood redevelopment anchors. He also says the highest velocity of activity is being generated by a seasoned-owner demographic that includes equity funds with “plenty of dry powder who are aligning themselves with local operators. Regardless of vintage or class, multi-family investments across the board are poised for asking-rent and property value acceleration.”

The North and Central New Jersey, to the Greater Philadelphia Metro/Southwest Jersey and New York State, are showing signs of increased investment activity. During the third quarter sales totaled 28 deals valued at more than $560 million, encompassing 3,557 units. Top submarket benchmarks involved 1,298 units/$199.28 million in Essex County; 760 units/$140.38 million in Bergen County; and 198 units/$53.91 million in Hudson County.

Greater Philadelphia market specialists arranged sales involving a total of 519 units sold for $83.25 million.

“Demand has kicked in throughout the Greater Philadelphia Metro, which includes Philadelphia proper as well as South Jersey and the city’s northern and western suburbs. While Philadelphia has been steadily drawing new multi-family investment during the past 10 years or so, vacancies are dropping and annual average rent growth has risen to more than 4.6%—all good indicators of an ever-strengthening metro.”
In the second quarter of this year, the Livingston, NJ-based brokerage firm reported it had closed 65 transactions involving 5,675 multi-family units that old for more than $820 million.

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