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The South Bronx Is the Next 'It' Area, Real Estate Experts Predict

By  Eddie Small and Amy Zimmer | April 22, 2015 6:13am 

 Realtors and residents alike are betting on Mott Haven to become New York's next trendy neighborhood.
The South Bronx Is the Next 'It' Area, Real Estate Experts Predict
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MOTT HAVEN — Vernicia Colon and Peter Medina thought the South Bronx would be the ideal place to launch their pop-up shop that would sell pour-over coffee served alongside a "curated conversation series" on issues like race.

With Mott Haven's mix of "people from different backgrounds and different countries" and a critical mass of artists, the founders of Mix Coffehaus believed they'd find a loyal clientele in the area.

After two successful pop-up stints, they are now looking to create a permanent space to "bring the community closer together to do more creative and cool and meaningful things," said Colon, who is launching a Kickstarter campaign next month to raise $15,000 for the new spot in an undisclosed location.

With artsy additions like Mix Coffehaus, the neighborhood is inching toward becoming a hipster hub. For years, real estate forecasters have been dubbing the South Bronx waterfront as the next "it" neighborhood, predicting it would bloom like Long Island City, thanks to its proximity to Manhattan and its industrial buildings that could be ideal for loft living.

While those visions never panned out, now, all bets are back on as investors and developers are swooping in and snatching up properties in the South Bronx as the Brooklyn and Queens waterfronts have become increasing unaffordable, real estate experts say.

Still, Colon didn't exactly find landlords welcoming her concept with open arms.

"It's been more of a challenge to find the 'right' space and also convincing some landlords that a coffee shop would better suit the neighborhood over a, say, cab service," she said.

"It's awesome to be like one of the first to serve a great product in the neighborhood and have the neighborhood excited for it," said Medina, who believes the South Bronx's transformation will follow Williamsburg's footsteps. "We want to be in the forefront of being in this area in the beginning."

Developers were bullish on Mott Haven's transformation in the mid-2000s, when, for instance, a former piano factory at 112 Lincoln Ave. was turned into a development called the Clocktower with 95 loft-style apartments. But when the recession hit, plans to expand the project halted. This building has since become the area's epicenter of cool with its huge roofdeck outfitted with pagodas and lounge chairs and the newcomer to the area's budding culinary scene of the ground floor, Charlie's Bar and Kitchen.

The Clocktower's developers recently renewed plans to add a 150-unit building to the complex and another 170-unit a few blocks away, according to reports.

"You can feel the buzz and there’s some momentum coming," said Dan Fitzgibbons, a 35-year-old bar manager at Charlie’s Bar and Kitchen, who moved to the building about 16 months ago from his "shoebox" in the Lower East Side to be closer to work and get the "New York experience" of loft living.

"I thought it was pretty hip," Fitzgibbons said of the area. "It's still quite industrial, which I like. It’s like a community. Downtown, you don’t even know your neighbor.”

In August, a 1,150-square-foot loft in the building was listed on the market for $3,500 a month and a 1,000-square-foot two-bedroom was listed for $2,500, according to StreetEasy.

These rents were a lot higher than what's typical in the area.

Overall, Mott Haven's median asking rent in 2014 was $1,538 — a nearly 27 percent increase in two years, according to data compiled by StreetEasy for DNAinfo New York. Still, rents in the area are half of Manhattan rents.

"One of the biggest gripes is gentrification and the increasing rents," Fitzgibbons said. "[I] don't want people getting priced out. [But] I’m happy to see some progression."

He especially wants more amenities though, so he doesn't have to travel as much to his old neighborhood.

"I’ll be happier when there are more things here, when there are a few more restaurants and somewhere to get a decent cup of coffee in the morning," Fitzgibbons added.

Keith Rubenstein, founder and principal of the real estate investment company Somerset Partners, is one of Mott Haven's newest cheerleaders — and a trendsetter, he hopes.

Somerset teamed up with the Chetrit Group (the developer who caused controversy after buying Manhattan's Hotel Chelsea), buying two properties along the Harlem River at 101 Lincoln Ave. and 2401 Third Ave. for $58 million.

In addition to his plans to bring a new residential community with retail to that 5-acre site, Rubenstein also purchased a brownstone at 285 Alexander Ave., which he plans to restore and most likely rent out.

“It had charm and character to it, and I thought it was a great opportunity,” said Rubenstein, who was drawn to the area for its access to mass transit and budding restaurant scene that includes the Mott Haven Bar and Grill, Asian fusion eatery Ceetay and Charlie's.

“I was impressed by the great views along the waterfront," Rubenstein said, "and I was impressed by some of the old industrial buildings that were there. And it really felt like a great place to be.”

While real estate prices in Bronx are still lower than other parts of the city, the borough saw the city's biggest price per-square-foot increase — 13 percent to $181 — in the first quarter of the year and also showed a double-digit increase in the number of development sites sold, according to a recent report by Cushman & Wakefield.  

"I see a lot of outside investors, a lot of people from Manhattan looking in the Bronx," said Manny Pantiga, of the Pantiga Group, a Bronx-based real estate firm. "You can find a brownstone at 140th and Alexander Avenue [in Mott Haven] for $500,000 with two studios, plus a one-bedroom and basement. If you move a few blocks over to Harlem it's double the price."

Tourism  — often a harbinger of rising real estate prices — jumped in the borough by 14 percent from 2012 to 2013, and NYC & Company recently launched a new tourism campaign focusing on rebranding the Bronx. 

"I've been hearing a lot of people I know in Williamsburg, Bushwick and the Lower East Side say they have friends in the Bronx now," said Aramis Arjona, of Mirador Real Estate. "They don't even know where they're heading when they visit, they just know they're going near the Clocktower."

Over the last few years, he's rented out several apartments at a glassy building at 615 E. 138th St., where he sometimes gets "dirty looks from the older people who have been there" when he stands outside, he said.

But he knew the area was becoming more "hipster" when the food market on the block started selling more organic produce and he saw young men with skateboards hanging out.

"People are looking to change their neighborhood or scene but they're not looking for culture shock," he said.