Record-high asking rents and selling prices for commercial real estate in the five boroughs pose an ongoing challenge for investors seeking to maximize returns. A recent article in The Journal News notes high asking rents and the conversion of commercial space into residential in Manhattan is now driving companies to explore options in Westchester County. Among the Westchester communities where these businesses have found new commercial space are Elmsford, Mount Vernon and Yonkers.
While some businesses are opting for new development, others are purchasing under-valued Class-B and Class-C assets and adapting them for new, modern uses. Commercial activity of note in the Hudson Valley includes:
- Approval of a 434-unit mixed-use apartment complex with ground floor restaurant and retail in White Plains. Initial project plans also include a proposed park.
- A 300-acre site in East Fishkill that formerly housed IBM’s campus which is slated for redevelopment into a 2 million-square-foot mixed-use complex housing retail, residential units and a hotel.
- In Dutchess County, a 700,000-square-foot expansion project at Vassar Brothers Medical Center is helping create new jobs in the region which will drive further demand for housing, including multifamily units.
- Building projects in Mount Vernon which include adaptive reuse of Class-B and Class-C assets for restaurants, retail and other attractions.
- In Harrison, Wegmans Family Markets Inc. has received approval to tear down three vacant office buildings to build a 125,000-square-foot retail storefront in what is deemed the town’s “Platinum Mile.”
Northeast PCG currently has several commercial listings for value-add investors in the Hudson Valley, including:
- A mixed-use portfolio on Route 9 in Wappinger Falls that includes two buildings for a total of 25 units. The price is $6,725,000 with a 7.16-percent cap rate.
- A fully-occupied retail property in Rye at a price of $1,450,000
- A multifamily property in Mount Vernon with 7 units that was fully renovated in 2000. The price is $1,050,000 with a 5.75-percent cap rate.
Northeast PCG’s New York office recently sold a 25,000 square foot retail plaza on Route 276 in Poughkeepsie, NY, for a competitive 8-percent cap price.
“The Hudson Valley offers value-add investors access to a wide-range of Class-B and Class-C properties that are viable for adaptive reuse,” Jeff Wright, licensed associate in the firm’s New York office notes. “Communities which are easily accessible from Midtown Manhattan are desirable for investors and tenants alike.”