Residential rental properties are increasingly becoming one of the more stable investments in New York City thanks to low vacancy rates and population growth.
Over the past several years, the price of rentals per square foot have risen in just about all the boroughs, the Wall Street Journal reported. The average price in the Bronx rose 51 percent from the second quarter of 2013 to $160 per square foot in the same quarter of this year, according to Cushman & Wakefield . During that same time period, prices rose 77 percent in Brooklyn from $209 to $369.
Investors like New Jersey-based Treetop Development are turning to market-rate and affordable apartment buildings, once considered a risky investment. Aspen Companies, an affiliate of Treetop, paid $26.4 million for two Morris Heights properties in July. Earlier this year, Treetop bought two development sites at 121-129 East 144th Street in Mott
The properties Treetop now targets offer limited cash flow but appreciate in value, Treetop principal Adam Mermelstein said to the Journal. The ROI comes during a refinancing or sale, while Aspen’s affordable properties are lower-priced but bring steadier earnings.
“One of the more tangible trends is the shift of folks getting out of their comfort zone as to what they would normally buy, whether it’s buying the same type [of investment property] in a different geographic location or a different product type all together,” Bob Knakal, chairman of New York investment sales at Cushman & Wakefield, told the newspaper. [WSJ] — Kathryn Brenzel