A look back: Bronx saw tremendous multifamily, retail and commercial real estate growth in 2015 - by Jason Gold

Jason Gold, Ariel Property Advisors

In recent years, as New York City’s multifamily, retail and commercial real estate sectors have become extremely aggressive, the Bronx specifically has been recognized for its great potential of untapped growth opportunities. That view garnered significant momentum in 2015 as several established, institutional investors and developers - including Youngwoo & Associates, Extell Development, Vanbarton Group, Savanna and Chetrit Group/Somerset Partners – kicked off a variety pioneering projects that are sure to reverberate throughout the borough.

While final 2015 numbers are still coming in, to date the Bronx has seen the sale of 488 properties for nearly $2.4 billion, a steady uptick year over year.  Located 15 minutes away from Manhattan, the South Bronx represented 42% of the entire borough’s sales in 2015, underscoring an ongoing wave of interest from investors, developers and tenants.

Multifamily housing remained in high demand with year-to-date statistics showing price per s/f reaching $158, and price per unit at $135,500, both showing increases of over 25%. In October, Ariel Property Advisors brokered the $90 million sale of the Continental Portfolio, a package of 13 multifamily buildings – one of the borough’s largest multifamily deals to take place in 2015. Combined, the buildings contain 612 units and have a gross area of approximately 553,304 s/f.  The sale price of $90 million translates to over $160 per s/f, significantly below what many neighborhoods in Manhattan and Brooklyn are seeing. This large portfolio spans throughout the Bronx in the Wakefield, University Heights/Fordham, Mount Eden/Mount Hope and the Lower Concourse neighborhoods.

A major boost to the Bronx retail industry was the recent $133 million purchase of Riverdale Crossing, a 159,037 s/f shopping center by New York-based real estate investment and advisory firm Vanbarton Group.  Formerly known as the Stella D’oro Cookie Factory and vacant for nearly two years, this outdoor mall has become home to BJ’s Wholesale Club, its anchor tenant, making this the second store of its kind to open in the Bronx.  Widely known retailers such as Petco, Chipotle and Smashburger have also recognized the draw to this borough and opened their first Bronx-based stores in Riverdale Crossing.  Located in the northwest Bronx neighborhood of Kingsbridge right by the 1 subway line and between Broadway and the Major Deegan Expressway, Riverdale Crossing is an advanced step in striving to meet the growing consumer needs taking place in this emerging borough.

In the South Bronx, Manhattan developers, Youngwoo & Associates, has plans to convert a former post office, located in the South Bronx at 558 Grand Concourse, into the rebranded “Bronx Post Place,” a unique mixed-use building with dining, office space, retail options while maintaining the ongoing operation of the U.S. Post Office utilizing 175,000 s/f. The building was originally built in 1937, listed as a New York City Landmark in 1976 and officially added to the National Register of Historic Places in 1980.  Earlier this year, the developer’s plans were approved by The Landmarks and Preservation Commission.    

This expanding interest in the Bronx is having positive impacts beyond real estate and further strengthening the borough.  According to data obtained from Bronx borough president Ruben Diaz Jr. and the New York State Department of Labor, the Bronx has continued to show advancement with regards to job creation and economic development.  Unemployment in the Bronx was 8.9% in October 2014 and fell to 6.5% a year later in October 2015. This spurring borough wide development has translated into the creation of thousands of new jobs.

Despite higher interest rates on the horizon we remain optimistic about New York City and Bronx real estate prospects for 2016.

Rich with ethnic diversity, the Bronx has long offered a world of flavorful neighborhoods, outstanding restaurants, art institutions, museums and unique tourist attractions like Yankee Stadium – each of which draws hundreds of thousands of visitors each year.  Recently completed real estate developments as well as those in the pipeline are sure to enhance the borough’s quality of life for future generations to come.

Jason Gold is a vice president at Ariel Property Advisors, New York, N.Y.