Ariel Property Advisors releases Bronx 2013 Year-End Sales Report

Investment property transactions in the Bronx increased 23% and the dollar volume of those trades rose 13% in 2013 compared to 2012, Ariel Property Advisors' Bronx 2013 Year-End Sales Report shows. In 2013, the Bronx saw 295 transactions comprised of 474 properties totaling $1.674 billion in gross consideration, compared to 2012, which saw $1.479 billion in sales over 240 transactions comprised of 373 properties. The 2013 figures also represent a significant jump in transactions and dollar volume from 2011 levels. "The investment property sales market in 2013 was defined by numerous large multifamily portfolio transactions as well as significant retail trades, and the beginning of several game changing developments that will have a wide impact on the borough for years to come," said Scot Hirschfield of Ariel Property Advisors. Overall, multifamily prices in the Bronx reached their highest levels since the period before the financial crisis, with average prices per square foot exceeding $100 and prices per unit exceeding $105,000. Multifamily investment activity clustered around the western neighborhoods of the Bronx, with Riverdale attracting buyers willing to buy market-rate multifamily buildings for a 5 cap and 10 times the gross rent. "With development picking up throughout the city and with several major public-private initiatives underway, Bronx development sites are poised to gain more traction in 2014," Hirschfield said. "News outlets are already noting that the South Bronx, or SoBro, is attracting a steady stream of hipsters, luxury loft conversions, and new restaurants. A luxury hotel even opened its doors on East 149th Street in the historic Bronx Opera House." The following is a summary of the 2013 investment property sales in the Bronx by major asset class: Multifamily The borough's growing population led buyers to invest in housing in 2013 and multifamily sales dominated the Bronx investment market capturing 59% of the borough's transaction volume and 65% of the dollar volume. This sales report shows 175 multifamily transactions comprised of 283 buildings valued at more than $1 billion dollars, a 25% increase in transactions, 30% increase in properties sold, and 11% increase in dollar volume. Cap rates fell to 7.71% in 2013 from 8.05% in 2012, and year-over-year the GRM increased to 7.24 from 7.04, price per square foot rose to $112 from $97, and price per unit increased to $106,000 from $90,108. Commercial Sites Investment in commercial sites resulted in 11% of the transactions and 15% of the dollar volume for the borough. The dollar volume of these deals totaled more than $253 million, which is a 190% jump from 2012, but the 38 properties sold in 32 transactions were flat year-over-year. In spite of the opening of new malls in the Bronx, the borough remains under-retailed and investors have taken note. New players are entering the market from Manhattan and beyond with particular interest in transportation hubs that attract public investment. An example of this interest was the $133.9 million purchase of the 262,000 s/f, mixed-use Fordham Place at 400 East Fordham Rd. by Illinois-based Retail Properties of America, a real estate investment trust. Development Sites Development transactions generated 24% of the borough's total investment transactions. A total of 72 development, industrial, and garage transactions consisting of 122 properties changed hands, a 33% and 22% increase, respectively. The total value of transactions was $199 million, which represents a 42% decline year-over-year, but land values are increasing with average price per buildable s/f increasing from $30 to $32. Several major development projects were announced this year. None larger than La Central, a $345 million housing complex with five buildings in Melrose is expected to break ground in 2015 and will include 985 units of affordable housing, a YMCA and a blend of retail and community oriented space. Public-private partnerships defined the Bronx during the year with the city council's approval of the Kingsbridge National Ice Center, which will house nine ice rinks, a 5,000-seat arena, and community space in the long-vacant Kingsbridge Armory, and the MTA's sale of a site near the intersection of East Gun Hill Road and the New England Thruway, on which developers Grid Properties and the Gotham Organization will build a 260,000 s/f retail space. The Bronx 2013 Year-End Sales Report tracks investment property sales $850,000 and over. A copy of Ariel Property Advisors' Bronx 2013 Year-End Sales Report is available at http://arielpa.com/newsroom/report-APA-Bronx-2013-Sales-Report.