Philly's Apartment Heat Wave
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Thought today's temps were hot? Try Philly multifamily. (Figuratively, of course... most units in the city have air conditioning.) Values are rising because there’s a ton of equity driving deals—buyers are even underwriting more aggressively than brokers. And expect an even more sweltering summer, according to HFF senior managing directors Mark Thomson and Zac Pierce.
The duo just closed on the $38M sale of the 150-unit Presidential Palace in Lebanon, NJ (above) and brokered the sale of the 502-unit Charter Court at East Falls (below) in March. Even though HFF only opened its Philly office in December, it's already amassed $400M in total inventory. Zac and Mark say that their collaboration with other HFF offices—including Northern NJ (wow, North Jersey is willing to sneak away and play with Philly behind NY's back... scandalous!), whose Jose Cruz recruited them from Marcus and Millichap—helps them to import capital from other East Coast markets where cap rates have compressed. (Treetop Development out of Teaneck, NJ, made Charter Court its first area buy.)
Zac adds to expect a flurry of activity over the summer as multifamily occupancy increases, with focus on Center City and transit-oriented Main Line towns. (Probably the surest forecast we’ve heard since that octopus predicted all the World Cup games.) They're also looking toward expanding their Conshohocken office, which covers the Tri-State, Central PA, and Central Jersey. So far, HFF debt and equity specialists Ryan Ade and James Conley, retail specialist Chris Munley, and seven support staff are already on board.