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BRONX, NY-A joint venture of White Plains-based Acadia Realty Trust and P/A Associates plans an estimated $35- to $40-million redevelopment of a site at 400 East Fordham Rd. here that is currently home to a Sears, whose lease expires in 2007. Sears has been in the site near Fordham University for 40 years. There is a potential of as much as 85,000 sf of expansion on the site. Miles Mahony of NAI Friedland Realty represented both the buyer and seller.
"Fordham Road is a unique, high barrier-to-entry market which is currently underserved by national retailers," says Kenneth F. Bernstein, Acadia's president and CEO. According to New York City statistics, Fordham Road is the strongest retail area in the borough and is the third largest retail corridor in all of New York City, with over 650,000 people in a two-mile radius and annual retail sales in excess of $500 million.
Bernstein says the strength of the retail market is evidenced by rents exceeding $75 per sf with many retailers utilizing multi-level formats. Acadia sees the potential for retailers not already established in the Bronx such as Target, Kohl's, Office Max, Bed Bath & Beyond, Best Buy and Wal-Mart.
"The Fordham Road redevelopment is the first of what we expect will be several New York urban/infill redevelopment projects that we plan to execute with P/A Associates," Bernstein adds. The redevelopment work will begin when Sear's current lease expires.
Acadia is acquiring the site through Acadia Strategic Opportunity Fund II LLC. The fund II, which has $300 million of committed discretionary capital, was established to acquire up to $900 million of real estate assets on a leveraged basis as well as invest in Acadia's Retailer Controlled Property Venture with the Klaff Organization. Upon completion of the redevelopment, it is anticipated the project will earn an unleveraged yield in excess of 10%.
P/A Associates was formed by Aaron Malinsky and Paul Slayton to concentrate on urban development/redevelopment opportunities. Malinsky is no stranger to development in the Bronx. He is one of the principals of the recently completed River Plaza, a 235,000-sf, $90-million shopping center located at 225th Street here. Slayton, an active real estate developer for more than 40 years, has the developed six million sf of shopping centers. Acadia currently owns, or has interests in, and operates 68 properties totaling approximately nine million sf.
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