When real estate companies and developers begin to look at your neighborhood more and more intently we know that there is a big danger of gentrification creeping in. When investments begin to top $2 billion in The Bronx, that means we’re no longer the final frontier but things are already happening.
According to Real Estate Weekly:
“Robust job growth, new retail and residential projects, and pro-business local officials are among the reasons investors are finding the Bronx an attractive place for their investment dollars.
During a panel discussion at the Manhattan North Association of Realtors’ 13th Annual Trade Show, moderator Shimon Shkury, president of Ariel Property Advisors, said $1.15 billion was spent on investment property in the Bronx in the first half of the year, and the borough is expected to end the year with sales exceeding $2 billion.
The price per square foot for commercial properties also is rising from $213 per square foot in 2010 to $396 per square foot in the first half of 2014.
“We’re bullish on the Bronx because we like to invest in places where we can make money and part of what we like about the Bronx is we feel we can,” Frost said.
“There is a huge amount of infrastructure here that doesn’t exist in other places. The subways are already here, the parks are already here… and there are some real institutions in the Bronx that help support it such as Montefiore Medical Center and Albert Einstein College of Medicine, the Zoo, Fordham, and the Botanical Garden.”
The developer said the changes in the Bronx are helping turn the area into a tourist destination, noting that the Opera House Hotel on 149th Street is 100 percent occupied.
Frost said that his firm is planning to build a Hampton Inn near Yankee Stadium. New projects like the planned re-development of the Bronx Post Office also have the potential to attract tourists. In the last 12 years, the Stagg Group has built 2,500 units of housing and currently has six projects with 600 units under construction in the Bronx.
Seble Williams said that Emmes began investing in properties in the Bronx in the 1990s as part of a 100-plus distressed portfolio across all boroughs.
“If you look at the value that was achieved in that portfolio, most of it was because of the neighborhoods improving and the growth of the neighborhoods where these properties were located,” she said.
“So we recognize the unrealized value of the outer boroughs.”
Last year Emmes launched the Emmes Interborough Fund, a $160 million fund that targets retail, multifamily, and office investments across New York City’s outer boroughs, Williams said. The Fund recently purchased a portfolio of five buildings with 80,000 s/f of retail in the Bronx, all locations near transportation hubs.
The properties, which are 86
percent occupied with a mix of national retailers and small, local businesses, were considered a “core plus play.”
Williams said her firm sees opportunity in the Bronx because there is a $9 billion demand annually for retail in the borough, but a third of the market isn’t being served.
As a result, the borough is experiencing “retail leakage,” meaning that residents are spending their dollars in other boroughs and in other states instead of the Bronx.
She said she also sees value on the Bronx waterfront.”
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