Investment in the Bronx cools down: borough president
Total investment dropped about 18% last year from 2016’s $3.3B
UPDATED, 10:58 a.m., May 22: About $2.7 billion worth of real estate investment poured into the Bronx last year—the second highest amount since 2009 but an 18 percent drop from the year prior.
Residential projects dominated the investment mix last year, comprising about $2.3 billion of the total, according to Bronx Borough President Ruben Diaz Jr.’s annual development report. Commercial projects made up about $171 million, and institutional projects made up about $238 million.
The investment total was the second highest amount since Diaz became borough president in 2009, according to his office. It fell short of 2016’s total, when a record $3.3 billion of real estate investments came to the borough. However, the total square footage was higher in 2017 at about 16.3 million square feet, compared to 14.2 million square feet the year before.
Prior to 2017, total investment in the borough had risen steadily every year between 2013 and 2016, according to the report.
The residential projects from last year included a total of 7,379 units, split between 3,080 unsubsidized and 4,299 subsidized.
Community District 1, which includes the up-and-coming Mott Haven and Port Morris neighborhoods, saw the most investment at around $600 million. The smallest amount was in Community District 12 in the northern Williamsbridge and Wakefield neighborhoods, which saw about $61.4 million.
The largest project in the Bronx for 2017 was a mixed-use development at 425 Grand Concourse in Mott Haven from Trinity Financial, which represents a $164 million investment. The company is planning a 289-unit affordable housing project with MBD Community Housing on the site that will also feature a charter school, supermarket, medical facility and community space.
The largest purely residential development last year was in West Farms at 1932 Bryant Avenue, where the Association of New York Catholic Homes and Sav Enterprises are working on a $147 million 15-story project with 319 affordable housing units. This was followed by Bronx Commons, BFC Partners’ and WHEDco’s $140 million affordable housing project at 430 East 163rd Street, and Phipps Houses’ $86.7 million affordable housing project at 600 East 156th Street with 174 units. Bronx Commons will also include retail, green space and a performance space called the Bronx Music Hall
The largest commercial development was more than $100 million less than the top residential project and did not crack the top 10 overall: Marcal Group’s $40 million, 111,324-square-foot project at 3111 Wilkinson Avenue, alternately addressed as 3250 Westchester Avenue. The building will mostly be used for community health facilities.
The largest institutional development was the Parks Department’s $54 million investment at 1561 East 174th Street by Playground 174, one of the sites identified for improvements under the city’s Community Parks Initiative.
Diaz unveiled the report at the Bronx Week Business Luncheon on Tuesday, which took place at the event space Tosca Marquee in Throgs Neck.
An analysis by The Real Deal last May found that between 2009 and 2016, market prices rose at least three times faster than building net income in more than half of apartment building transactions, indicating that many transactions in the borough have been speculative. If rent rolls in the borough do not increase, this disconnect could leave investors in a tight spot, depending on the terms of their debt.
This piece has been updated to include more information about Bronx Commons.