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. —E.S.
Longwood/Morrisania, The Bronx
The adjacent neighborhoods have seen residential applications skyrocket over the past decade
Longwood and Morrisania may not have completely escaped the problems that plagued the South Bronx during the infamous 1970s, but there are growing signs that the two adjacent neighborhoods are ready for their time in the spotlight.
A brownstone-lined street in Longwood’s historic district
The number of proposed residential units in Longwood and Morrisania skyrocketed 1,137 percent from 73 in 2008 to 903 units last year, according to TRD’s analysis of DOB data. Commercial sales volume has more than doubled, jumping to $152 million from about $64 million over the same time period.
Haniff Baksh, principal broker at the Bronx’s Besmatch Realty, said there has been a particularly strong uptick in renovations to the neighborhoods’ older housing stock.
“What we’re seeing is a lot of these older properties, they are being sold,” he said, “[and] either rehabbed, or in some cases there are some new developments in the area.”
The current housing stock in Longwood and Morrisania is a mixture of properties ranging from smaller one-family homes to public housing to apartment buildings with roughly 40 to 50 units, Baksh said. But some developers have filed plans for much larger projects in the neighborhoods.
The Ader Group, a real estate investment firm based upstate, is planning a 14-story, 243-unit affordable building on the site of a former parking facility — the first phase of a two-building, 474-unit complex. Additionally, Manhattan-based Property Resources Corporation filed plans for an eight-story, mixed-income building alongside two five-story buildings at 970 Kelly Street, a development that will contain 161 residential units. And on the border of Morrisania and Melrose, BFC Partners and WHEDco are planning the massive Bronx Commons project, which will include 305 affordable housing units and a 300-seat music hall.
Land prices in the area are generally between $50 and $60 per buildable square foot, according to Michael Tortorici, executive vice president at Ariel Property Advisors. He said that returns are currently easier to come by with affordable developments, but market-rate projects will likely become more prevalent.
“The difference between market-rate and affordable in the Bronx is not as wide as in other areas of the city,” he said. “So when subsidies are available to do affordable, sometimes it tips the scale to do it that way.”
Liang Li, a real estate agent with Nest Seekers International who lives and works in Longwood, said he’s lately been seeing more interest in the neighborhood from Harlem residents who are looking to get more space for less money.
“Not just the rent part,” he said. “It’s also cost of living. Just by comparing the cost of coffee or orange juice, I think that also matters for some people.”
Median asking rents in Longwood were $1,825 and $1,900 in Morrisania as of November, according to StreetEasy. That was significantly cheaper than East, Central and West Harlem, where they were $2,300, $2,397 and $2,725, respectively.
However, Longwood and Morrisania still lack some of the hallmarks of gentrifying areas. For instance, there has yet to be a burst of trendy new restaurants and cafes. Retail in the neighborhood, concentrated on Boston Road and Third Avenue, is largely a mix of discount stores, hair salons, delis and other small businesses.
Morrisania is part of the poorest neighborhood district in NYC, according to city statistics from 2015, while in Longwood, almost 50 percent of households are considered “rent-burdened.” However, crime has been steadily dropping. Over the past seven years, murders in the precincts covering Longwood and Morrisania have dropped 50 percent and 20 percent, respectively, according to stats from the NYPD.
Tortorici said investors based in Manhattan are eager to snatch up multifamily properties throughout the Bronx, and Longwood and Morrisania are no exception to this.
“I think Manhattan investors are looking at any multifamily that they can see in the Bronx. I don’t think it’s exclusive to necessarily a neighborhood,” he said. “If it’s in Longwood or Morrisania, they’re paying attention to those offerings.” —E.S.
East New York, Brooklyn
Affordable housing is where profits are currently penciling out, but questions are swirling about when the area will be ready for market-rate
When Brooklyn’s East New York was rezoned in 2016, it touched off a real estate makeover.
That year, developers filed applications for 339 residential units. But in 2017 that number shot up by 284 percent to 1,303 units — many of them heavy on the affordable housing.
A handful of developers have gotten in on the ground floor.
Multifamily developer Radson Development is preparing projects for two vacant lots: one a 235-unit mixed-use, 12-story building on Linden Boulevard, the other a 521-unit affordable housing-and-retail complex on Loring Avenue.
Meanwhile, Monadnock Development, the East Brooklyn Congregations and the Department of Housing Preservation and Development filed plans in September for a 240-unit affordable rental development as part of the sprawling Nehemiah Spring Creek development, which sits on city-owned land adjacent to the Gateway Center shopping mall.
And Phipps Housing is diving in with a 403-unit affordable housing complex on Atlantic Avenue in Cypress Hills, a section of East New York.
(Click to enlarge)
Though some of those developments are outside of East New York’s rezoned area — which includes about 190 blocks, roughly between Fulton and Belmont avenues — competition for investment properties in the area is strong.
That may be because residential prices in East New York have shot up 45 percent since 2012 — the same sort of jump being logged in pricey Brooklyn neighborhoods like Carroll Gardens and Park Slope, according to PropertyShark.
“There’s a lot of cash buyers coming in looking for good deals, mostly for [two- and three-family homes they can rent out] anywhere under the million-dollar range,” noted Citi Habitats broker Kendall Vidal, who said he has 20 interested parties for one property he’s selling in the neighborhood.
Investors are “super interested in the area,” partly because they are banking on the fact that buyers and renters will increasingly get priced out of other areas and turn to East New York as a cheaper alternative.
The neighborhood — which is on six subway lines and the Long Island Rail Road — is a short train ride from Bushwick and Bedford-Stuyvesant, where rents shot up by 44 percent and 36 percent, respectively, between 1990 and 2014. But it has a different genetic makeup.
“A lot more rental units in East New York are rent-stabilized and rent-controlled than in Bushwick and Bed-Stuy,” said Ideal Properties Group’s Aleksandra Scepanovic.
Real estate players say that for now, affordable housing is where profits are penciling out. That’s thanks largely to the availability of tax-exempt bonds and government subsidies.
“I don’t see a huge rush of for-profit buying at these prices to build market-rate housing,” said Alan Bell, a principal at B B Urban, which is building a 100-unit affordable rental project in the area.
Bell, whose firm invested before the rezoning was finalized and land prices shot up, said he’s not sure whether B B could make the project work financially now. In some cases, property owners are looking for prices between $70 and $80 per buildable square foot, he said. That’s almost twice the roughly $43 average the neighborhood was seeing in 2014, according to TerraCRG.
“Owners of property are going to have to get more realistic, [and] when it happens I’ll be ready to jump,” Bell said.
In general, East New York is not without its warts. While crime has fallen 73 percent since 1990, more major crimes were committed in East New York and Cypress Hills than in any other precinct citywide in 2017. And crime there was twice what Williamsburg and Bed-Stuy saw, according to the NYPD.
And commercial sales volume has not seen the same bump as residential. While there was $155.5 million in commercial deals in 2017 — a 27 percent increase from 2008 — the neighborhood peaked in 2015, when $274.8 million in property traded hands.
Bell said the first wave of market-rate housing will likely get built on smaller plots, where sellers may be more willing to drop prices. Those who own large parce上海千花社区