New development in the Bronx is swinging into gear and some developers are seeing an opening for well-appointed, moderately priced market-rate rentals.
Multifamily sales figures are growing for the borough – long known as a home for working class New Yorkers – and firms such as Treetop Development, the Chetrit Group and Somerset partners are digging in, the Wall Street Journal reported.
“There’s so much talk about, hype about, luxury development and developers cashing in big on princes and billionaires buying super-expensive apartments,” Treetop’s Adam Mermelstein told the Journal. “We are trying to fill a niche that has been neglected over the past years.”
Treetop is planning a large residential building at 121-129 East 144th Street in Mott Haven. If they build fully market-rate, the city allows 68,000 square feet of space. If they include affordable units, they can build 91,100 square feet.
Rents at the building could run from about $1,700 to $2,041 a month for a 700-square-foot unit, the Journal reported.
Rental building sales in the Bronx totaled $1.7 billion in 2015, up from about $1.6 billion the previous year, according to Ariel Property Advisors. The average per-square-foot price also climbed, to $160 from $121 back in 2014, a 32 percent rise.
Without the 421a tax abatement, which expired earlier this year, developing market-rate rentals anywhere in New York is “extraordinarily difficult,” veteran commercial broker Bob Knakal of Cushman & Wakefield told the Journal.
But Mermelstein and Azi Mandel, Treetop’s other boss, told the Journal they agreed, but believe a similar tax subsidy is likely to be put in place soon.
In its November cover story, The Real Deal explored the rental and sales market in the South Bronx. Due to low land prices, investors are able to eek out market-rate rentals in the borough. An analysis by the South Bronx Overall Economic Development Corp. found that the South Bronx can accommodate 2.8 million square feet of affordable and market-rate apartments. [WSJ] – Ariel Stulberg