Brach Eichler real estate outlook for 2020: Continued growth in multifamily, commercial sectors in Mid-Atlantic region

By Emily Bader
New Jersey | Feb 3, 2020 at 11:43 am

Brach Eichler’s real estate practice announced on Monday it closed just under $2.05 billion worth of real estate deals in 2019.

The Roseland-based law firm’s Allen J. Popowitz, real estate practice chair, said the strong year was due to positive sector trends throughout the Mid-Atlantic region.

The strongest sector was multifamily, Brach Eichler said, with 25,000 total units sold across 80 deals. The included one deal with about 6,000 apartments valued at more than $1 billion. The top states for multifamily included New Jersey, New York, Pennsylvania, Delaware, Maryland, Michigan and Virginia.

Other significant deals included:

  • Over 1,500 apartments in Michigan for one investor (five properties);
  • The refinancing of 11 properties with nearly 3,000 units in the Capital District of New York;
  • The acquisition of eight properties containing a total of 1,500 apartments in North Carolina, Virginia and Maryland;
  • Commercial properties represented industrial, retail and other uses, including office buildings, automobile dealerships, a gas station, hotels, country clubs, warehouses, industrial, self storage, 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,” Popowitz said. “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.”

New York’s bedroom communities outside its metro area, Popowitz said, are hot, with a high rate of development in Hudson County.

Real estate outlook for 2020

Brach Eichler’s Alan R. Hammer, member of the real estate practice, said the country’s thriving economy and stock market are indicators 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, member, said.

He also said a new type 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.

Trends that will shape the real estate landscape in 2020 include:

  • As the single practitioner model in health care continues to decline and practices merge or are acquired, small office spaces will become more available;
  • As the medical field consolidates, it will continue to drive demand for larger facilities to absorb its expansion;
  • Medical facilities are starting to occupy different spaces, such as urgent care facilities going into shopping malls and office buildings;
  • Rehabilitation facilities are becoming more popular and expanding into retail.

“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,” Popowitz said.

Emily Bader | ebader@roi-nj.com | @emilybader