NEW YORK, NY – February 5, 2024 – In 2023, the Bronx investment sales market saw $1.82 billion trade across 216 transactions, down 22% and 29% respectively, compared to 2022, according to Ariel Property Advisors’ Bronx 2023 Year-End Commercial Real Estate Trends report.

“Affordable housing was a bright spot in the investment sales market in the Bronx in 2023,” said Jason M. Gold, Senior Director in Investment Sales for Ariel. “The most significant transaction of the year was Nuveen’s partial interest acquisition of the Omni Affordable Housing Portfolio. The Bronx portion of the portfolio was valued at $635.3 million and included about 66% of the package’s total units.”

Daniel Mahfar, Director, added that the development market also showed positive metrics last year. “Pricing for development sites reached a record high of $98/BSF, and the borough is expected to attract more investment as the City seeks to create 6,000 new homes by rezoning parts of the East Bronx near Metro-North commuter rail stops,” he said.

The following is a summary of the performance of each asset class in the Bronx in 2023:

Multifamily

      •  Multifamily dollar volume declined a modest 6% in 2023 from 2022 to $1.1 billion, and transaction volume fell by 41%, to 82 transactions. The Omni Portfolio sale accounted for over 50% of the dollar volume in this asset class.
      •  Buildings with at least 75% rent-stabilized units dropped in value from $168/SF to $137/SF year over-year, which caused the overall multifamily pricing to decrease to $169/SF, the lowest level since 2015.
      •  The price per unit also fell to a new low of $142,100 per unit. Additionally, cap rates rose to 6.48%, consistent with the lower pricing metrics.

Development

      •  The Bronx development sector saw a 16% decrease in dollar volume year-over year to $275.4 million across 57 transactions.
      •  The price per buildable square foot rose to the highest level ever seen in the Bronx, $98/BSF, breaking last year’s 11-year record of $93/BSF. Many of these development trades were vested with the highly desirable 421a tax abatement program, which expired in June 2022.
      •  The top three sales--748 E 241St St, 1298 Inwood Ave and 1320 Inwood Ave--will reportedly become sites for affordable housing.

Industrial

      •  The Bronx industrial sector in 2023 saw a decrease of 52% in dollar volume to $205.4 million and a slight decline in transactions to 32. This asset class only saw one transaction above $20 million, the lowest level since 2018.
      •  Pricing metrics for the Bronx industrial sector in 2023 decreased from the 2022 high of $421/GSF to $334/GSF while the price per lot square foot increased by 26% to $246/SF.
      •  The largest industrial sale was Sprague Operating Resources LLC’s purchase of a gas distribution site at 1020-1040 East 149th Street for $73.5 million, which translates to $282/SF.

Commercial

      •  Year-over-year, dollar volume in the commercial sector fell 34% to $148.4 million and transactions dropped 31% to 33 trades.
      •  The price per square foot for commercial properties dipped to $442/SF, a 17% decrease from the previous two years. Higher interest rates have demanded higher cap rates, resulting in lower valuations.
      •  Some commercial assets commanded higher prices due to their proximity to transportation and positioning in main retail corridors. For example, 2241 Westchester Avenue, which is anchored by Planet Fitness and a block from a subway, sold for $14.5 million, which translates to $525/SF. Also, 5561 Broadway, home to a Walgreens and steps from the subway, sold for $9.25 million which translates to $638/SF.