With spring just around the corner, the first blooms of the season can’t be far behind. But while we’re waiting, the Bronx is already blooming – at least the Bronx investment real estate market. It’s been firming up over the past six months, and we see that activity continuing through the rest of this year.
As with other New York City submarkets, the Bronx has seen sales activity bounce back briskly since the market collapse of 2008 and 2009. However, it’s not nearly as active today as its pre-recession levels. That said, pricing has firmed up now that much of the recent market “distress” has been resolved.
For those considering investing in the Bronx, be prepared for onerous New York City building regulations, rent stabilization, tenant-biased housing courts and expensive utilities. Long-term Bronx multifamily investors inevitably get beat up over time, with many heading to Westchester or to Connecticut or even entirely out of multifamily into other asset types. However, not to worry, the buyer pool for well-priced Bronx multifamily is fairly constant.
It’s easy to see why if you get to know the borough like we have. Along the Hudson River, Riverdale is very attractive with more affluent tenants and a fine stock of elevator mid-rise apartment buildings. A recent 50-unit multifamily listing on Van Cortlandt Park is now fetching offers over 10 times gross rents. Further east in Woodlawn, another desirable submarket for investment, we are marketing a 63-unit walk-up apartment building and asking 8 times gross rents.
Fordham Road still remains a frontier for many investors, although we’ve seen a tremendous amount of activity further south in Little Italy, Bronx Park South and west along the Grand Concourse. Our recent multifamily listings in these submarkets are getting done at pricing approximately 7 times gross rents for walk-up buildings.
In the South Bronx, the buyer pool is not quite as deep as for other submarkets. That said, it’s an emerging area that offers good transportation and is home to Yankee Stadium. We are currently marketing a 48-unit multifamily building near Hunts Point that has seen a fair amount of interest.
Looking at recent trends, 2011 into 2012 saw a significant increase in investment sales in the Bronx — approximately 50%. With interest rates continuing to remain low rates and with more attractive yields in comparison to some other boroughs, we expect the trend to continue throughout 2013.
Looking ahead, our investment sales teams are well positioned to support multifamily and commercial investors in the strengthening market Bronx market. If you’re a property owner or an investor in the mid-market segment and want to discuss your investment goals and how we can help you achieve them, please give us a call.