Ready...Set...BUILD Multifamily

Welcome to the debt of The Unit – Perspectives in Multifamily; a monthly blog covering topics and insight in relation to multifamily from a Commercial Broker perspective.  All commentary is strictly personal opinion, but embodies a combination of in-the-field experience and material data from a myriad of credible sources.  As an interactive forum, The Unit welcomes dialogue from investors, professionals, and entities open to express constructive viewpoints connected to the multifamily sector.  So with no further ado, let’s get busy!

The year 2011 saw multifamily position itself by far as the most stabilized sector in commercial real estate.  Velocity of acquisitions soared as principals (novice and seasoned) engaged in a buying frenzy to absorb apartment value-adds thru bulk tapes, discounted non-performing notes, short sale, and bank-owned REO/OREO respectively.  In 2012, the challenge lies in sustaining purchasing power momentum as inventory for QUALITY multifamily assets is expected to remain anemic.  Consequently, the ongoing foreclosure crisis in residential continues to produce casualties as homeowners are involuntarily being converted back to tenants prospects for apartment rentals.  This newfound demographic coupled with college graduates entering the workforce have created a new generation of renters.  Experienced landlord principals looking to capture a portion of this emerging market might want to seriously consider testing the waters of new construction and redevelopment. 

In speaking with a host of Northern New Jersey (Essex, Hudson, and Union Counties respectively) tenant prospects, it was apparent the two (2) major factors taken into account in their respective apartment rental search were 1) modernized units with functional layouts and 2) buildings in close proximity to public transportation.  Projects with a high walkability element that incorporate mixed-use components comprised of practical street level retail catering to daily consumer living (i.e...health food conscience grocery, fitness clubs, dry cleaners, etc) will fare very well.  Aesthetically pleasing multifamily mid-rise structures featuring amenities such as elevators, 24-hour video surveillance, covered on-site parking, and LEED (Leadership in Energy and Environmental Design) certification represent attributes developers are implored to take into account.  Transit Village initiatives in Newark, Harrison, Jersey City, and New Brunswick are prime examples of this developing trend.  As New Jersey is a transit hub for a plethora of commuters to New York City and Philadelphia plus the most densely populated state in the country, The Garden State is a breeding ground for tenant prospects seeking quality housing.  Whatever your multifamily revitalization play is; erecting brand new construction, rehabbing residential 2-4 unit apartments, or retrofitting sizable pre-existing structures, the same concept applies for super serving this growing consumer base.  Shovels and sledgehammers get ready…set…BUILD!