The Bronx’s Big Surprise
What are you missing in the Bronx? You've heard that capital is chasing yield there, but we suspect many of you haven't seen it recently. Follow along and let our camera guide you.
We drove the borough with Massey Knakal SVP Karl Brumback, who tells us most outer-borough gentrification ripples outward from Manhattan. That’s happening in the Bronx, too, but hot spots also dot the entire borough, emanating from large-scale redevelopments, established neighborhoods and rezonings. Starting right across the Harlem River in the South Bronx, a parcel in Mott Haven next to the Third Avenue Bridge will be home to a big waterfront development. The 1,300-unit, affordable housing Compass Residences at 172nd Street broke ground in January on rezoned industrial land, and the 985-unit, mixed-income La Central is planned for former City land on 153rd Street. Combined, that pair alone represents $700M of investment on the Bronx waterfront.
Farther north, across the river from Innwood, in Kingsbridge, Equity One’s 130k SF Broadway Plaza at 230th Street, which we snapped from the road, opened last month, following this year’s openings of the River Plaza (home of the country’s busiest Target) and Bay Plaza malls. Between Broadway and the Major Deegan, the former parking lot, marketed on behalf of NYC and the EDC, hosts Sports Authority, TJ Maxx, Party City and Aldi.
Massey Knakal is marketing other development opps nearby, including as much as 800k buildable SF at 320 W Fordham Rd (above is a possible look for the site). There's also 6017 Broadway with 135K of buildable SF fronting Van Cortlandt Park, steps from the 1 train at the foot of Manhattan College.
On the same corridor, the two-acre site of the bankrupt Loehmann’s at 5740 Broadway under the 1 train is going self-storage and retail. Across the street, Karl just sold a tavern and two parking lots (63k buildable SF) for almost $80/buildable. It'll be a mixed-use development.
And a block farther north, Metropolitan Realty Associates has leased up 95% of the five-acre, 162k SF Riverdale Crossing it’s building on the site of the former Stella D'Oro Bakery. BJ’s will anchor and Buffalo Wild Wings, Petco, Smashburger and Bank of America are on board.
Market-rate housing will follow all the retail and waterfront development, Karl says (though in the Bronx, that means middle income). Sites are still available here for $45/SF, compared to $125 in Queens and $300 in Brooklyn. Like the Sycamore Court apartments at 230th and Corlear, where a medical office component accompanies 72 apartments that leased rapidly for over $30/SF.
South of Van Cortland Park, Kingsbridge Heights is another investment hot spot, at the confluence of the James J. Peters VA Medical Center, Lehman College, The Bronx High School of Science, Dewitt Clinton High School, the northern tip of the rezoned Jerome Avenue retail corridor, Jerome Park Reservoir, the 4 and B/D trains, and the Grand Concourse. Here, apartments (both steady ROI and investment needed) are trading at a fast clip, Karl tells us. 135 W Kingsbridge Rd (above)—with 58 units, 10 stores and plenty of upside—sold earlier this year for $160k/unit. 2406 University Ave nearby just closed for more than $220k/unit and 10 times the rent roll.
Upping the ante in the neighborhood is the planned redo of the Kingsbridge Armory into the world’s largest ice skating center. The developer signed a 99-year ground lease last month, clearing the way for redevelopment of this underutilized icon.
Prices are rising so rapidly that Karl can’t use comps from even late-2013 or early-2014 sales. 2700 Jerome Ave (above), across the street from the Armory, will likely trade for twice its value of two years ago.
Even Cyndi Lauper is getting in on the action. Following the supportive housing project she and West End Residences put up in Harlem for homeless LBGTQ youth, the 30-unit True Colors Bronx is rising at 2808 Jerome.