Cash makes a difference as opportunity zone funds and small investors scour New Jersey and the Northeast for real estate assets
Tighter Capital Markets Give Cash-Hungry Investors a Competitive Edge, A&G Executives Report; buyer inquiries on 64 properties New Jersey The portfolio highlights the breadth of interest in residential, commercial and raw land assets, including among real estate newcomers.
TRENTON, NJ, July 18, 2022 /PRNewswire/ — Stock market volatility and a tight lending environment are expanding the pool of investors seeking commercial and multi-family real estate in New Jersey and the Northeast, report veterans of real estate sales in A&G Real Estate Partners.
“The S&P 500 entered a bear market just a few weeks ago, but we are already seeing a more diverse array of investors – some of whom have never focused on real estate before – flocking to the relatively safe harbor that represents real estate,” said Andy Graiser, co-chairman of A&G. “Yes, capital markets are tighter, but retail investors who have cash have actually discovered After opportunities in real estate over the past few weeks, no less. This is because competitors with larger financing needs stay away. »
These trends are visible among the dozens of investors who are now vying for a stabilized portfolio of 64 properties marketed by A&G in the center and Southern New Jersey, said Graiser. The sealed auction closes July 27.
“Investors avoid stock market volatility and look for stabilized, income-generating real estate assets,” he noted. “Because cap rates are higher now, there are better returns, especially if you’re an all-cash buyer. That’s a big change from where the market was a year ago.”
Focus on income
In this environment, investors are increasingly focusing on income such as rental housing and commercial properties, said Emilio Amendolaco-president A&G.
It’s part of what sparked investor interest in the property 64 New Jersey portfolio, offered by a non-distressed seller who has renovated many buildings over the past 20 years. The portfolio comprises six asset pools each ranging from two to 29 properties, with opportunities for commercial and residential development as well as single and multi-family homes in good condition. “The portfolio is 92% occupied, with an average revenue per unit of around $1,225 per month for single-family and multi-family homes,” Amendola said. “We’ve had investors who are new to real estate form groups to seek out these income-generating assets.”
Qualified Opportunity Zone (QOZ) are also showing more intense interest in QOZ assets in New Jersey and around the northeast. “In the case of the New Jersey portfolio, approximately 40% of the proposed assets are located in QOZs,” Amendola noted. “We are certainly seeing substantial interest in these assets from Opportunity Zone funds.
These QOZ assets include leasehold income-generating properties such as the 70,000 square foot private academy located at 1770 Mt. Ephraim Ave. at Camden. “The tenant in place will pay $288,000 triple net income thanks to August 2025“, Amendola said. “For QOZ funds and other investors, it’s a win-win.”
Virgin land, haven of peace
Investors today are also more focused on acquiring and owning raw land, Graiser said. “We see that with the New Jersey wallet while builders, developers and investors view vacant land as a haven,” he said. “For example, our proposed single-family site at 328 Stokes Road in Medford is surrounded by houses worth up to $1 million.”
Similarly, the single-family sites that A&G markets in New Jersey seaside towns Little Egg Harbor and ocean gate are strong land bank opportunities. “As soon as the development conditions are again more favorable, the bulldozers could get moving,” Graiser said.
Developers have also shown strong interest in commercial land parcels available at auction. They include a 2.27 acre undeveloped site on Highway 73 in the Marlton section of Evesham Township – a prime location between the high traffic Promenade Shops and Willow Ridge Square.
For Graiser, whose real estate career spans more than 30 years, trends point to the opportunities that always emerge in tough market conditions. “In New York, we see certain spaces that were rented out for $800 per square foot choose $400 per square foot,” he said. “Smart retailers are locking down these spaces for the future.
Press contacts for A&G: Jaffe Communications (908-789-0700), Elisa Krantz, [email protected]
SOURCE A&G Real Estate Partners