Real Estate Weekly reported that The Bronx saw a record breaking increase in sales of multifamily properties reaching $2.4 billion in transactions in 2014 as per data published by Ariel Property Advisors’ Bronx 2014 Year-End Report.
According to REW, “Investment sales transaction volume increased by 11 percent to 342, and the number of properties traded increased 20 percent to 577 in 2014 compared to 2013,” a number of those transactions took place in Melrose, Mott Haven, Morrisania, and Tremont accounting for 2 million square feet of buildable space in just 24 properties alone.
The report also detailed Related Companies purchase of 35 building portfolio building in the northern Bronx to a tune of $253 million indicating that the sales were not just confined to the South Bronx.
However, it is in the South Bronx where the big plans and sales are when you look at the transactions at a price per square foot basis as the Cherit Group’s purchase of 101 Lincoln Avenue for $32 million for an 83,000 square foot building with a 133,700 square foot lot sold for $385/sq ft.
This is where, according to the Real Deal, the Cherit Group is planning to plop down 6 residential towers — and according to a representative from the developer will be market rate and condos will not be ruled out.
The rezoning of the Lower Concourse allows this lot, and two additional adjacent lots that the Cherit Group is in the midst of acquiring, to construct up to 25 story residential buildings. One of the lots, 2401 Third Avenue (pictured below and outlined) is reportedly being sold to Cherit for $26 million. A couple of buildings over is 2417 Third Avenue which is under contract for $31 million to developer Hornig Capital. That brings a total of $89 million dollars in sales for these 3 properties (accounting for a combined 257,000 square feet for an average of $346/sq ft) located across from each other in just a little over 2 months.
2 1/2 years ago, CubeSmart Storage company purchased 200 E 135th Street which is behind 2417 Third Avenue and next to 2401 Third Avenue for $68,234,000. That property currently has 214,560 square foot building along with a 6.3 acre waterfront lot. According to public record, this lot can accommodate almost 2 million square feet of development and is zoned as M13/R8/MX1 allowing for residential development.
The group has yet to file plans on any sort of construction but the writing is on the wall as yesterday Mayor Bill de Blasio focused on the Lower Concourse and pumping $200 million in capital improvements to the Special Harlem River Waterfront District to spur construction of the proposed 4,000 units in this district — a portion of which will be for “affordable housing” (affordable for who exactly as we know the archaic AMI, Area Median Income, is not reflective of the districts they’re calculated for).
From the northern borders of Melrose on 165th Street all the way south to the waterfront of Port Morris, Mott Haven and the Lower Concourse, change is moving at such a fast pace. Although most of the residential developments have been “affordable” housing, such housing, which was built under the Bloomberg administration, will start seeing their affordable rents expire within the next couple of years.
Once that happens, the developers or owners can begin to charge market rate rents in these buildings and then what will happen to those thousands of tenants that moved in to these developments? Will they be displaced?