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Bronx Commercial Real Estate Sales Boomed in 2012, a New Report Shows

By Patrick Wall | January 31, 2013 11:57am

THE BRONX — Bronx commercial real estate sales spiked last year to their highest levels since the financial crisis, a new report found.

Investors poured $1.28 billion into the borough’s real estate market in 2012 — a 63 percent surge over the $613 million spent in 2011, according to an analysis by Ariel Property Advisors, which focused on larger investment properties worth about $1 million or more.

Both the number of properties purchased and amount spent shot up, driven largely by apartment building sales, reflecting rock-bottom interest rates and a shifting view of The Bronx as a low-cost, high-return haven for investors, the report said.

“With prices soaring and yields falling in other areas of New York City,” the report said, “investors are increasingly choosing The Bronx as the destination — not an alternative — for their capital.”

Roughly 70 percent of Bronx real estate dollars were spent on apartment buildings, with more than 10,000 units within the buildings bought and sold — the most of any borough, according to a separate citywide analysis by the firm.

Bronx apartment prices rose by 9 percent, but at an average price of less than $85,000 per unit and $94 per square foot, they are still the lowest in the city and less than a fifth of the average square-foot cost of apartments in Manhattan, the citywide report shows.

Investors looking to cash in on the ongoing demand for real estate, but avoid rising prices in places like Northern Manhattan and Brooklyn, flocked to The Bronx, where savvy buyers can expect a bigger bang for their buck, said Ariel Vice President Scot Hirschfield.

“In The Bronx, the return you make on your investment is much greater than in the other boroughs,” Hirschfield said, but only “if you have the experience and manpower to manage your property.”

Bronx apartments are often “management-intensive,” he explained, and require expertise in Section 8 and other rent-subsidy programs.

Bedford Park saw the most apartment sales, with 23 buildings sold for a total of $78.1 million at an average price of $88 a square foot, according to the citywide report.

Investors spent the least on Soundview apartments, where two buildings were sold together for $2 million at an average price of $65 per square foot, the report showed.

Sales of Bronx industrial sites, particularly large storage facilities, also enjoyed a boom last year with about $202 million in trades — a full 168 percent increase over 2011, according to the Bronx report.

Commercial site spending also rose, driven by the sale of several retail strips, the report showed.

Spending on land for development was the one sector to slip, according to the report, though the average price for a square foot of buildable land did increase to $30.

The mid and northwest Bronx, including Bedford Park, Belmont, Fordham and other neighborhoods north of the Cross-Bronx Expressway but south of Van Cortlandt Park, saw the most overall real estate action, Hirschfield said.

The Bronx was not the only borough to enjoy a jump in real estate sales last year — the number of apartment buildings sold and dollars spent edged up across the city, according to Ariel’s citywide report.

Sales spiked in the final quarter of 2012, the Bronx report noted, as owners rushed to sell before higher capital-gains taxes took effect this year.