Brach Eichler’s Real Estate Industry Outlook for 2020 Reveals Continued Growth for Multifamily and Commercial Sectors in Mid-Atlantic Region

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Low Interest Rates, Strong Investor Activity, Robust Multifamily Market Contributed to N.J. Law Firm Closing Over $2 Billion in Real Estate Transactions in 2019

Our investor clients in the New York metro market are seeing the value in investing further south where greater yields are available. In addition, the demand for workforce housing is still very strong in those markets, as well as in New Jersey and New York.

The Real Estate practice at Brach Eichler, a Roseland, N.J.-based law firm, has announced that it closed just under $2.05 billion in real estate deals in 2019. Real Estate Practice Chair Allen J. Popowitz said the strong year was a continuation of a positive trend in real estate throughout the mid-Atlantic states.

Among the highlights:

  • The strongest sector was multifamily, with 25,000 total units across 80 transactions, representing sales, purchases and refinancing. This included one deal with more than 6,000 apartments with a transaction value over $1 billion. The predominant property locations for multifamily included NJ, NY, NC, PA, DE, MD, MI, and VA.

Other significant deals for private investors included:

  • Over 1,500 apartments in Michigan for one investor (five properties)
  • The refinancing of 11 properties containing almost 3,000 units in the Capital District of New York
  • The acquisition of over eight properties containing a total of 1,500 apartments in NC, VA, and MD)
  • Commercial properties represented a diverse cross-section of industrial, retail and other commercial uses, including office buildings, automobile dealerships, a gas station, hotels, country clubs, warehouse distribution and industrial buildings, a self-storage facility, strip malls, and mobile home parks.

“For our clients, Maryland and Virginia are playing a significant role in this continuing velocity of real estate transactions, as is North Carolina and Michigan,” said Popowitz. “Our investor clients in the New York metro market are seeing the value in investing further south where greater yields are available. In addition, the demand for workforce housing is still very strong in those markets, as well as in New Jersey and New York.” Popowitz noted that the New York metro area bedroom communities are still hot, with a high rate of redevelopment in Hudson County, which he said had been long underappreciated.

In terms of lenders, Brach Eichler Real Estate Member Alan R. Hammer said that Fannie Mae and Freddie Mac are still actively lending on the largest transactions. “Insurance companies—principal lenders in real estate—are lending selectively to investors at very good rates. In addition, local banks are actively and aggressively lending to individuals with solid investment track records, and they remain keen on working with time-honored products and customers they know,” said Hammer.

The Real Estate Outlook for 2020

Hammer pointed to the country’s sound economy and the booming stock market as a leading indicator of what to expect in 2020. “The real estate market will remain very active, as mortgage interest rates remain at historic lows. Since this is an election year, we can be fairly sure that the incumbent president running for re-election will remain committed to low interest rates and the availability of inexpensive capital.”

Hammer also noted that a new kind of investor has entered the market in recent years.

“They are people who’ve accumulated wealth by investing in other asset classes and now want to be in real estate, particularly industrial and multifamily properties, which will continue to fuel this robust level of activity,” he said.

According to Popowitz and Hammer, among the trends that will continue to shape the real estate landscape in 2020 are those related to shifts in the healthcare field:

  • As the single practitioner model of healthcare continues to decline and practices merge or are acquired by hospitals, abandoned small-office space once occupied by healthcare providers will become available.
  • Conversely, as medical practices and hospitals consolidate, they will continue to drive demand for larger facilities to absorb their expansion.
  • Medical facilities are occupying different spaces than in prior years. Urgent care facilities will continue to proliferate due to consumer demand; expect to see more of them going into shopping malls and office buildings.
  • Rehabilitation facilities are becoming more numerous and expanding into the retail space, as well.

Popowitz also acknowledged the considerable vacancies in suburban office buildings. “In 2020, we’ll see owners adding many new amenities to attract tenants, as well as converting formerly vacant office properties into multifamily, retail, and community spaces with enhanced services such as conference rooms and game areas.”

About Brach Eichler’s Real Estate Practice
With one of the deepest real estate law benches in New Jersey, Brach Eichler’s Real Estate practice serves professional real estate investors, operators, and developers, as well as real estate lenders in the purchase, sale, leasing, and financing of land, land for development, office buildings, malls, multifamily complexes, retail centers, and industrial properties. The firm is particularly well- known for its expertise in apartment building development, acquisition, sales, and financing, closing a substantial number of transactions in New Jersey and throughout much of the country. The firm’s tax practice is skilled in all aspects of real estate taxation, including tax appeals, 1031 exchanges, and solutions to minimize the impact of federal, state, and local taxes on the transaction. Additionally, the firm’s environmental and land use attorneys advise clients on environmental law, assisting with challenging land use, natural resource, and site remediation concerns.

About Brach Eichler LLC
Brach Eichler LLC, is a full-service law firm based in Roseland, NJ. With over 80 attorneys, the firm is focused in these practice areas: Healthcare Law; Real Estate; Litigation; Trusts and Estates; Business Transactions & Financial Services; Personal Injury; Criminal Defense and Government Investigations; Labor and Employment; Environmental and Land Use; Family Law; Patent, Intellectual Property & Information Technology; Real Estate Tax Appeals; Tax; and Cannabis Law. Brach Eichler and its attorneys have been recognized by clients and peers alike in The Best Lawyers in America©, Chambers USA, and New Jersey Super Lawyers. For more information, visit http://www.bracheichler.com.

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