Bronx real estate sales may have dipped this year, but the selling prices have soared.
Developers paid 20% more for Bronx commercial real estate on the market during the first half of this year compared to the second half of 2011, according to newly released analysis by an investment property sales firm.
But it also found the number of properties sold declined, according to the report by Ariel Property Advisors.
For the first six months of this year, developers made 84 transactions comprised of 138 properties totaling $491 million. That was a drop of 28% from 2011, which saw 115 transactions totaling 153 properties going for $408 million.
But the dollar figure is more important than the number of transactions in the mixed report, said Scot Hirschfield, vice president of the firm.
“The higher value is more important than the number of transactions because the number of transactions can change very easily,” he said.
From retail strips to private housing, the Bronx saw an average of $6 million per transaction, said Hirschfield. “That’s nearly double the average deal size seen in both the first and second halves of 2011.”
The multi-family sector led the pack with 56 transactions totaling $306 million. It was helped by the sale of 2150 Wallace Avenue, a 71-unit Pelham Parkway complex where buyers paid $115,000 per unit.
The $8.5 million sale – a “trophy transaction” because of its financial stability – made it one of the highest purchases ever in the north Bronx, according to the report.
In the south Bronx, the Southern Boulevard Portfolio, a nine-building collection of 372 units, closed for $33 million.
Hirschfield credits stable management as the source behind these large-scale purchases.
“If you have a strong system in place for collections, then your returns will be greater,” he said.
But commercial sites were lagging in transactions, despite several new large retail areas in development, namely the addition at the Bay Plaza shopping mall, the revitilization project for the Kingsbridge Armory and an outlet mall near the Whitesone Multiplex Cinemas.
Development sites also dragged. Of the seven transactions made, the sale of the former factory for H.W. Wilson Company in Highbridge sold for over $10 million.
Behind the Bronx boom, the report found, are attractive bank interest rates, which have stayed relatively low since the 2008 financial crash.
Another factor is the borough’s overall safety, according to Hirschfield.
“People who live in the Bronx are spending more time in the Bronx,” he said.
For the next half, Hirschfield predicts a steady climb in real estate transactions during this “exciting time.”
“This is a renaissance period,” he said.
Reach reporter David Cruz at 718-742-3383.
David Cruz can be reach via e-mail at DCruz@cnglocal.com or by phone at (718) 742-3383
