New Jersey multifamily property market strengthens

The New Jersey multifamily market improved in recent months.

A large portion of commercial industry members in New Jersey feel that the commercial real estate situation has improved, and the multifamily sector has led the way, according to GlobeSt.com.

The industry experts, who spoke at a conference in New Brunswick, New Jersey, explained that the multifamily market has higher rents, while vacancy rates are slightly elevated due to a large amount of new completed construction. This included apartments and multi-purpose communities, the news source said.

Multifamily market shows positive signs for the future
Carl Goldberg, principal for Roseland Property, explained to the news source that property management companies may not need to worry about a multifamily bubble due to these newly-constructed properties. There are signs of a changing belief in homeownership, and many consumers could be looking for a rental property over owning property.

Goldberg also noted that more Americans look to areas with a living option that allows them to avoid using a car, the news source reported. Mass transit options have become more popular in recent years, and this could increase. Additionally, the multifamily market may continue to grow in the Garden State during the next couple of years because lending has become harder to obtain. This is mainly due to stricter lending rules from financial institutions.

There may be further rental investment options for industry members in New Jersey outside of the traditional Class A properties in the market, the report explained. There are many other parts of the state with plenty of property options.

"The opportunity for multifamily moving forward is going to be those folks who would like to be in a core market but are being elbowed out of the race and we are going to see it going west in our state to be in a more secondary or tertiary market because they can’t compete in the core markets," said Michael Fasano, vice president and regional manager at the Elmwood Park branch of Marcus & Milichap.

Another panelist added that occupancy rates of older, lower-level properties could improve if investors upgrade them. This is due to rents being able to increase with some repairs, and many tenants being more attracted to these property options. These options are typically more affordable to purchase and have a better return, if restored correctly.

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