Bronx Investment Sales Picked Up Steam in Late 2015

The investment sales market in the Bronx posted staggering gains last year. Source: Ariel Property Advisors

NEW YORK CITY—Several sectors of the real estate investment market in the Bronx enjoyed a significant increase in activity in 2015, led by the development property market, which enjoyed a 63% increase over 2014 levels. Bronx development site sales posted strong dollar volume at $379.5 million across 87 transactions last year. Prices also appreciated considerably—the average price per buildable foot climbed to $60, a 33% increase from the prior year, according to a report released by Ariel Property Advisors . The brokerage firm notes that Extell   Development made its first purchase in The Bronx with its acquisition of 2505 Bruckner Blvd. for $41 million. Another firm to put its toe into the Bronx investment market was the Lightstone Group , which purchased 917 Ogden Ave., a 39-unit apartment building in Highbridge. The deal marked the national real estate investment company’s first multifamily acquisition in the borough. “Several institutional investors and developers have recognized the Bronx for its great potential of untapped growth opportunities,” says Jason M. Gold , VP at Ariel Property Advisors, “In 2015, an increased presence of institutional players, which included Extell Development, Vanbarton Group , Savanna and Chetrit Group/Somerset Partners , flocked to the Bronx to execute a variety of projects which will have a long lasting impact on the borough” Overall, the Bronx registered 372 transactions in 2015 consisting of 580 properties totaling approximately $2.767 billion in gross consideration. Last year’s sales dollar volume was 16% higher than 2014 levels despite a modest 4% increase in transaction volume and a 2% decrease in property volume compared to 2014, which saw 356 transactions consisting of 590 properties for approximately $2.392 billion. Sales activity picked up considerably in the latter half of 2015 as $1.5 billion worth of sales were reported, a 30% increase over the same period in 2014. Although multifamily sales volume held steady, according to the Ariel report, multifamily buildings soared past $160-per-square-foot and the average gross rent multiple hit 10 times, a level that was surpassed in several instances. The report cited examples such as 865 Walton Ave., a mixed-use apartment building within the Lower Concourse District, which sold for more than $16.425 million, which was more than 15 times the gross rent. Another mixed-use property located at 649, 650 and 690 Allerton Ave. in Bronx Park East traded for $34.3 million, which represented more than $200-per-square-foot and roughly 12 times the gross rent. “Multifamily pricing in the Bronx continues to strengthen due to an increased demand from institutional investors,” notes Scot Hirschfield , VP at Ariel Property Advisors. “These investors have come from all over the world to the Metropolitan area to capitalize on the rising GRM’s and compressed cap rates.” Ariel Property Advisors recently released reports on record-setting sales posted in Brooklyn , as well as in New York City’s multifamily sector in 2015.