The Real Deal New York

The era of the South Bronx condo has yet to arrive … but it may not be too far away

Rentals remain dominant in Mott Haven, but some believe the condominium wave is coming
By Eddie Small | May 19, 2017 05:10PM

Clockwise, from left: 225 East 138th Street; 2401 Lincoln Avenue; 112 Lincoln Avenue; and 305 East 140th Street

Real estate in the South Bronx may be booming, but for now, prospective movers are much more likely to find an apartment than a condominium.

Mott Haven, the neighborhood at the center of the South Bronx development rush, currently has about 20,000 existing rental units with roughly 1,758 more on the way, according to data from The Real Deal. However, only three condo projects in the neighborhood have been filed over the past 10 years, one of which was abandoned.

Andrew Gerringer, managing director at the Marketing Directors, said it was typical for an emerging market like Mott Haven to see rental units arrive before condos, as the first wave of people moving into a new neighborhood generally want to make sure they can leave if things don’t work out.

“The artists and the restaurants come in first,” he said. “The apartment developers come in second, and the condo developers come in after them.”

The only condo project that has been completed in the neighborhood is Bronx Bricks at 305 East 140th Street. The 11-unit building was completed in 2008, with an approved sellout of $5.6 million.

Linda Cunningham, who was the managing member of Bronx Bricks LLC during the project’s development and still lives in the building, said the condo was fully occupied, and residents who have opted to sell have doubled their initial investments. However, the majority of owners didn’t move into Bronx Bricks to flip their units, she said.

“Most people who bought it this time had pretty good social values and were really not interested in changing the neighborhood to have a new Starbucks,” she said, “but wanted to affect it positively for the residents who were already here.”

Cunningham said she was not surprised at the slow pace of condo development in Mott Haven. While Bronx Bricks was being built, people told her to opt for rentals, since they’re easier to make a profit on.

While larger projects coming to the neighborhood — such as Carnegie Management’s 130-unit building at 23 Bruckner Boulevard and Somerset Partners’ massive project with the Chetrit Group along the waterfront — will be either mostly or entirely rental units, at least one new condo project is on its way to Mott Haven at 225 East 138th Street.

Tahoe Development is planning a 47-unit building, with a projected sellout of $25.3 million. The firm bought the site for $2.8 million in 2015 and had initially planned an 11-story rental building but switched to a seven-story condo to reduce costs and better serve the needs of the neighborhood, according to Anthony Gurino, president of Tahoe.

“The neighborhood calls for it,” Gurino said, adding that other developers have condos in the pipeline. “…Three to seven people a week are emailing us or calling to be on the list for condos.”

The firm closed on a $9.7 million construction loan in September from Investors Bank.

Tahoe’s building will include a high-end bagel shop on the ground floor, and the building’s amenities will also include a gym and a private rooftop garden. Gurino estimated that apartments would cost between roughly $375,000 and $410,000, with units ranging between 535 and 645 square feet.

Other condo projects have struggled to get off the ground in Mott Haven. An eight-unit condo proposed for 496 East 138th Street by NHS Community Development Corporation was abandoned, and although a sign by East 135th Street and Willis Avenue has advertised that luxury condos are coming, there is no filing for such a project in the New York Attorney General’s condo database, and an email to the address listed on the ad was not returned.

Gurino said the company has worked in prime hipster Brooklyn, and Mott Haven of today reminds him of those neighborhoods. “It has more of a Bushwick feel than anything else,” he said.