Ariel Property Advisors releases the Bronx year-end sale report 2011

In 2011, The Bronx saw 147 commercial real estate transactions consisting of 223 properties and totaling approximately $613 million in gross consideration, according to The Bronx Year-End Sales Report 2"Multifamily properties in The Bronx continue to be a popular investment strategy for both private landlords and institutions," said Scot Hirshfield, vice president of Ariel Property Advisors. "From a financial perspective compared to other boroughs, the yields are stronger and capitalization rates are significantly higher. Also, compared to 2010, there was positive momentum in terms of both volume and value for multifamily assets in The Bronx." According to the report, a relatively large number of portfolios traded throughout the borough in 2011, with the largest transaction being the purchase of 11 buildings along The Grand Concourse and Sheridan Avenue by Riverdale based Chestnut Holdings. The report highlights multifamily, development site, and retail and commercial property sales, and the market fundamentals that influenced investment sales Multifamily With roughly $543 million transacted, multifamily sales accounted for approximately two-thirds of the borough's total dollar volume in 2011. There were almost an identical amount of transactions in 2010, but due to the large amount of portfolio sales, there was a 33 percent increase in the number of buildings sold. This accounted for an additional $100 million or 25 percent increase in dollar volume. Throughout the borough, multifamily properties traded for an average of $96 per square foot and $81,000 per unit. Development Sites In 2011, there were very few transactions geared towards residential development. The Mott Haven section of the South Bronx accounted for most of these sales. One such trade took place on Eagle Avenue where the land was purchased by a private development company from a city agency for roughly $30 per buildable square foot. Looking ahead to 2012, development sales in The Bronx should increase due to recent rezonings in Central Bronx along Webster Avenue, as well as the area adjacent to the Bronx River Parkway. In fact, a development firm called Signature Urban Properties received city approval to rezone a portion of The Bronx for a five-acre mixed-use property development. The West Farms development will build a total of 10 mixed-use buildings and will add 46,000 square feet of retail space and 1,325 housing units, 663 of which will be used as subsidized housing. Retail /Commercial There was a great deal of buzz about retail properties in The Bronx in 2011. The Hub, which runs from 149th Street to 161st Street along Third Avenue, continues to spur interest due to the continued revival of the surrounding areas. Retail developers made headlines with the purchase of the former Stella D'oro factory for $17.5 million to an investment group that plans to build a shopping mall, as well as the announcement of the $270 million, 470,000 square foot Bay Plaza Shopping Center in the North Bronx, featuring Macy's as the anchor tenant. In total roughly $70 million worth of retail / commercial property was purchased in 2011, a significant increase from 2010. Looking ahead to 2012, the City is currently accepting bids for the redevelopment of the 575,000 square foot Kingsbridge Armory.Market Fundamentals As in the rest of the city, commercial real estate investors in The Bronx benefited from the improving job market, record low interest rates, and recovering residential rents that continue to approach levels not seen since 2008. Rents in 2011 for apartments in The Bronx remained consistent between $15-$18/square foot. In addition to Riverdale, the areas surrounding Fordham University commanded the highest rents due to the rising demand for student housing. The South Bronx continued to lag behind other parts of The Bronx in terms of $/square foot for rentals, but there should be an improvement as renters are priced out of more expensive areas in Northern Manhattan and Brooklyn. The Bronx has several key retail corridors with The Hub and Fordham Road receiving the highest rents. The Hub has seen an influx of new stores, particularly in clothing retail and fitness centers, catering to the working class community. With its proximity to Fordham University, the Fordham Road retail corridor is a densely packed commercial section of The Bronx. In general, Bronx retail has strengthened due to revitalization of neighborhoods and continued development of quality affordable housing. More information is available from Mr. Hirschfield, 212-544-9500, ext. 16, [email protected]. For a copy of the report, please see http://arielpa.com/newsroom/report-APA-Bronx-2011-Sales-Report. Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market. The firm also produces a number of research reports including the Multifamily Month in Review: New York City; Northern Manhattan Sales Report; Northern Manhattan Commercial Report; and the Northern Manhattan Residential Rental Report. More information is available at arielpa.com.