Why investors are flocking to Concourse and Melrose in the Bronx

Affordable developers are rushing into the South Bronx nabes with large-scale projects underway — and market-rate players are no doubt next

TRD NEW YORK /
Jan.January 23, 2018 07:30 AM

A famed fountain in the Grand Concourse’s Joyce Kilmer Par

For most New Yorkers, Melrose and Concourse are key points of reference in the Bronx — whether they know them by name or not. That’s largely because they are home to well-known destinations like Yankee Stadium and the borough’s courthouses.

But lately, in a major about-face, the adjacent South Bronx neighborhoods have seen a flurry of new investment activity.

In 2008 and 2009, the neighborhoods had zero new residential units in the pipeline. But in 2016, developers filed permits for 360 new units, and in 2017 they topped that and added another 403.

Commercial sales activity has also shot up, jumping to $210 million in 2017 from about $85 million in 2008 after peaking at $228 million in 2014.

And if Starbucks is still a true sign of gentrification, then Concourse landed on the real estate map in 2015 when the coffee chain opened its first local outpost, on East 161st Street. (Chipotle debuted next door two years later). Melrose, meanwhile, recently saw the opening of Italian restaurant Porto Salvo, which is serving octopus carpaccio and mango-and-arugula salad.

On the development front, two of the borough’s most anticipated projects — La Central in Melrose and Bronx Post Place in Concourse — are currently under construction.

La Central is located right by the Hub, a major retail center. It will contain almost 1,000 affordable rental units, along with a roughly 50,000-square-foot YMCA and a host of other amenities, including a rooftop telescope. Hudson Companies began work on phrase one of the project, which has a $335 million price tag, over the summer.

Just one subway stop away, Youngwoo & Associates is transforming the Bronx General Post Office into a mixed-use complex with ground-floor retail, office space and dining.

And Azimuth Development Group and the Upper Manhattan Development Corporation have filed plans to bring three affordable rentals with a combined 275 units over about 213,000 square feet to the area.

(Click to enlarge)

Hudson Companies’ Aaron Koffman said that he does not think the Melrose area is quite ready for a market-rate development on the scale of La Central. While he’s seen investors start coming in, they’ve mainly been land speculators.

“I see a lot of flippers. They buy and they don’t even fix it up,” he said. “They buy it, hold it for six months and then try to sell it for a 40 percent return.”

One thing that investors are undoubtedly eyeing is crime, which has dropped substantially in both neighborhoods in the last seven years.

And Mable Ivory, a real estate agent at Engel & Völkers who focuses on the South Bronx, said interest in Concourse has been growing as high-profile projects get closer to reality.

“A lot of people are coming from the city — all parts of the city,” she said. “It used to just be Harlem and Upper Manhattan. Now I have people coming to Concourse from Brooklyn, from Queens, from New Jersey even. They’re finding they get a lot for their money there.”

Market rate developers are no doubt next in line.

Click here to read more about outer borough areas that investors are running to in New York City.


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