Real estate investors have recently taken notice of the potentially lucrative opportunities commercial properties in The Bronx offer. Increased commercial sales activity and pricing reflect the borough’s growing attraction as a destination for new businesses and illustrates the market’s growing confidence in The Bronx’s economic prospects.

New data from Ariel Property Advisors’ 2016 Mid-Year Sales Report: The Bronx showed $85.7 million worth of commercial properties sold during the first half of 2016, a 13% increase from the 1H2015, which saw $76.1 million in gross consideration. The report also showed the average price per s/f for commercial properties jumped to $400, up 11% from last year’s $359. Looking at the borough’s industrial/garage/development segment, the first half saw 56 transactions totaling $262 million, which represents a 14% increase in transaction volume and an 11% increase in dollar volume year-over-year.

Improving economic fundamentals appear to have a role in fueling these sales trends and investor confidence. The NYCEDC recently noted that between 2004 and 2014, private sector jobs in the Bronx grew 20%, second only to Brooklyn in terms of borough-wide job growth. Further, the borough saw New York City’s sharpest decline in the unemployment rate, at -1.9% during that period.

Several recent transactions are a testament to the strength of the current market and the near-term upside potential investors are positioned to realize. Noteworthy transactions for the first half of this year include:

• 2703 East Tremont Ave.: In March, Rockfarmer Properties purchased a NNN leased Wendy’s for $6.675 million or $2,500 per s/f which translates to a 5.1% cap rate. The property is located in Westchester Square, a commercial district and transit hub in the southeast Bronx. 2703 East Tremont Ave. is an opportunity with 50,475 buildable s/f future development potential and consists of a 16,825 s/f lot with a Wendy’s restaurant and 21 parking spaces.

• 3488 Jerome Ave.: The Norwood subject is a 12,000 s/f property with nine commercial tenants traded hands for $13 million, giving the borough yet another commercial transaction above $1,000 per s/f this year.

• 9 Bruckner Blvd.: Additional exciting commercial projects include Somerset Partners’ July purchase of 9 Bruckner Blvd. a 16,000 s/f warehouse for $7.5 million or $470 per s/f. Plans for the property will include the conversion of 9 Bruckner Blvd. into a 30,000 s/f Gansevoort Market-style food hall called Bruckner Market.

• 825 East 141st St.: The Bluestone Group and Altmark Group have been actively purchasing commercial properties in the South Bronx. Recent examples include the purchase of 825 East 141st St. as well as 780 East 135th St. this past June. 825 East 141st St. is a 235,584 s/f industrial factory building in the Bronx, which was owned by the National Equipment Corporation. It was sold for $38.875 million, which amounts to approximately $165 per s/f for the seven-story building.

• 780 East 135th St.: Another acquisition of the partnership for $14.05 million which translates to approximately $166 per s/f. The six-story industrial warehouse building, which spans the entire block on Willow Ave. between East 134th and East 135th St. is a prime South Bronx property, which will be repositioned to either live/work artists’ lofts or creative office-type use.

• 1943-1955 Westchester Ave.: A fully occupied 9,000 s/f retail strip located in the Parkchester section of The Bronx. The property sold for $7.75 million, which translates to $861 per s/f, a value well above the area’s average price per s/f for commercial buildings. 1943-1955 Westchester Ave. commercial tenants have strong credit ratings and include: H&R Block, GNC, Petland, and a furniture store. R6 / C1-2 zoning also provides an additional 21,009 s/f of air rights, adding extra potential for future development.

In some ways, activity in The Bronx’s commercial sector mimics the positive developments occurring in its multifamily sector. During the 1H16, multifamily dollar volume rose 12% year-over-year, hitting $989.276 in gross sales. Prices are also at all-time highs.

Looking ahead, the deals highlighted above as well as FreshDirect’s imminent arrival to the area, we expect sales volume and pricing to hold at current levels over the balance of the year. According to August data from the Office of the New York City comptroller, New York City’s economy grew 1.7%, the slowest rate in two years, but still outpaced the national economy. With significant capital being deployed, economic growth prospects for The Bronx are up and paint a bright long-term picture for real estate investments.