NEW YORK, NY—Investment property transactions in the Bronx rose 6 percent and the number of properties sold increased 17 percent in the first half of 2013 compared to the first half of 2012, according to Ariel Property Advisors’ Bronx 2013 Mid-Year Sales Report. The dollar value of the trades, however, declined 13 percent year-over-year.
During the first two quarters of 2013, the borough saw 112 transactions comprised of 174 properties totaling $407.5 million, compared to the same period in 2012, which saw 106 transactions, 149 properties sold, and $467 million in gross consideration. When compared to the second half of 2012, which generated higher than usual activity in response to the expiration of the Bush tax cuts, transactions in the first half of 2013 fell 21 percent, the number of properties sold declined 25 percent, and dollar volume dropped 59 percent.
Among the asset classes, development transactions soared 81 percent in the first half of 2013 compared to the first half of 2012 and jumped 49 percent compared to the last six months of 2012, but multifamily transactions in the first half of 2013 fell 10 percent from the first half of 2012 and 40 percent from the second half of 2012.
“Although volume in the first six months of 2013 didn’t match the frenzied state of the market in the last two quarters of 2012, pricing metrics were strong for all property classes, especially in terms of price per square foot and price per unit where averages exceeded previous levels,” said Scot Hirschfield, vice president of Ariel Property Advisors. “The combination of today’s favorable lending environment with several major private and public projects that are in the works, bolster the outlook for economic development throughout the Bronx.”
Such projects include the redevelopment of the Kingsbridge Armory, which will be the largest indoor ice hockey facility in the country and is slated to be completed in 2018. The City continues to proactively take measures to foster quality commercial and residential development in the Bronx, and recently announced plans to rezone a stretch of East Fordham Road that is surrounded by The Bronx Zoo, Fordham University and Little Italy, thereby leveraging the location as a gateway to some of the borough’s premier attractions. In addition, the MTA is considering adding Metro-North service from the East Bronx to Penn Station, which would shorten travel times for commuters and promote economic development in those areas.
The following are highlights from the report:
- Multifamily: There were 55 multifamily transactions totaling $223 million in gross consideration in the first half of 2013. While the number of multifamily transactions declined from both the first half and second half of 2012, the values are trending positively in all pricing metrics. Cap rates averaged 7.95 percent, GRM’s were 6.96, the price per unit increased to $123,000, and the price per square foot was $114. The improved trends are a product of the favorable lending environment for established owners and operators, as well as an increase in transactions in neighborhoods such as Riverdale, Kingsbridge and Pelham.
- Development Sites. Transaction and dollar volume has had a significant increase in the past year. Forty-two transactions took place in the first half of 2013 compared to 23 transactions in the first half of 2012 and 28 in the second half of last year. The re-zoning of Webster Avenue has led to several development transactions along that corridor. The largest deal was the sale of New York Westchester Square Medical Center, which was purchased by Montefiore Medical Center.
- Commercial Sites. This sector saw an increase in dollar value in the first two quarters of 2013 compared to the first half and second half of 2012, but dipped in transaction and property volume. This is due to the fact that 2012 saw an abnormal number of large transactions in the storage industry. The price per square foot for commercial properties is increasing dramatically, especially along major retail corridors such as The Hub, Westchester Avenue and East 187th Street. In some cases properties traded for $400 per square foot.
- Office / Special Purpose. These sectors saw an impressive increase in all the metrics, dollar, transactions, and building volume from the first half of 2013 compared to the first half and second half of 2012. While dollar volume for the office sector increased a dramatic 428 percent from year-over-year, the special purpose sector saw tremendous growth in property sales from the second half of last year to the first half of this year. These figures were drawn mostly from the large portfolio Getty Realty Corp. acquired.
The Bronx 2013 Mid-Year Sales Report tracks property sales $750,000 and above and buildings of all sizes. For more information, please contact Mr. Hirschfield 212-544-9500, ext. 16, [email protected]. For a copy of the Bronx 2013 Mid-End Sales Report, please see http://arielpa.com/newsroom/report-APA-Bronx-mid2013-Sales-Report.
Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market. The firm also produces a number of research reports including the Multifamily Month in Review: New York City; Multifamily Quarter in Review: New York City; Multifamily Year in Review: New York City; Brooklyn Mid-Year and Year-End Sales Reports; Northern Manhattan Mid-Year and Year-End Sales Reports; and the Bronx Mid-Year and Year-End Sales Reports. More information is available at arielpa.com.