FOR IMMEDIATE RELEASE

NEW YORK, NY – October 31, 2014 – Robust job growth, new retail and residential projects, and pro-business local officials are among the reasons investors are finding the Bronx an attractive place for their investment dollars, said Shimon Shkury, president of Ariel Property Advisors, who presented “The Bronx is Booming,” a program and panel discussion at the recent Bronx-Manhattan North Association of Realtors’ 13th Annual Trade Show at the Bronx YMCA.

Mr. Shkury also moderated a panel discussion with industry leaders who are investing in the Bronx including Robert Frost, managing member of Signature Urban Properties and president of Signature Partners; Seble Tareke-Williams, managing director of Emmes Asset Management Company; and Mark Stagg, president & founder of the Stagg Group.

In the first half of the year the Bronx saw $1.15 billion in investment property sales, Mr. Shkury said, and the borough is expected to end the year with investment property sales exceeding $2 billion. Of the deals in the borough, the multifamily asset class has dominated investment sales and institutional investors have entered the market as new players.

Investors are attracted to the Bronx because they are finding higher returns relative to the rest of New York City, but prices are rising, Mr. Shkury said. Average cap rates at mid-year were around 6.6 percent, but in some deals cap rates have fallen below 6 percent and sometimes below 5 percent, he noted. The price per square foot for commercial properties also is rising from $213 per square foot in 2010 to $396 per square foot in the first half of 2014.

Mr. Shkury highlighted 14 major developments in the Bronx that have been completed or are in the development stage, and observed that if the four proposed Metro North stations are approved it will open up the eastern section of the Bronx to jobs and development. He also recognized that the zoning changes approved by the city are already spurring many new developments.

A 2011 zoning change from manufacturing to residential in the Crotona Park East/West Farms section of the Bronx is enabling Signature Urban Properties to develop 10 residential buildings with 1,300 affordable units, Mr. Frost said. Two of the buildings with 237 units are currently under construction and should be online by the end of 2015. The firm is hoping to break ground on two additional buildings in June of 2015 and another building at the end of 2015, which will leave five more buildings to build.

“We’re bullish on the Bronx because we like to invest in places where we can make money and part of what we like about the Bronx is we feel we can,” Mr. Frost said. “There is a huge amount of infrastructure here that doesn’t exist in other places. …the subways are already here, the parks are already here…and there are some real institutions in the Bronx that help support it such as Montefiore Medical Center and Albert Einstein College of Medicine, the Zoo, Fordham, and the Botanical Garden. We believe in it and within our investing in New York City it is really our primary focus.”

Mr. Frost observed that the changes in the Bronx in recent decades have been remarkable and that the borough is becoming a tourist destination. The Opera House Hotel on 149th Street is 100 percent occupied, and Mr. Frost said that his firm is planning to build a Hampton Inn near Yankee Stadium. New projects like the planned re-development of the Bronx Post Office also have the potential to attract tourists.

Mr. Stagg said in the last 12 years, the Stagg Group has built 2,500 units of housing and currently has six projects with 600 units under construction.

“I’m committed to bringing Manhattan to the Bronx,” Mr. Stagg said. “Housing is housing and people deserve a quality home, hard wood floor, granite counter top, sufficient light, and appliances that are user friendly.”

The Stagg Group builds ground up apartments for all income levels including homes for market rate tenants, Section 8 tenants, and veterans, and also owns and manages 1,200 units in all neighborhoods of the Bronx.

“We see great opportunity and great values in the Bronx after what’s happened in the last few years,” said Mr. Stagg. “I never could identify with the prices in Manhattan. I kept this niche and I fell in love with this borough.”

Ms. Williams said that Emmes began investing in properties in the Bronx in the 1990s as part of a 100-plus distressed portfolio across all boroughs. “If you look at the value that was achieved in that portfolio, most of it was because of the neighborhoods improving and the growth of the neighborhoods where these properties were located,” she said. “So we recognize the unrealized value of the outer boroughs.”

Last year Emmes launched the Emmes Interborough Fund, a $160 million fund that targets retail, multifamily, and office investments across New York City’s outer boroughs, Ms. Williams said. The Fund recently purchased a portfolio of five buildings with 80,000 square feet of retail in the Bronx on primary retail corridors such as Westchester Avenue, Burnside Avenue, Grand Concourse, and Fordham, all locations near transportation hubs. The properties, which are 86 percent occupied with a mix of national retailers and small, local businesses, were considered a “core plus play.”

Ms. Williams said her firm sees opportunity in the Bronx because there is a $9 billion demand annually for retail in the borough, but a third of the market isn’t being served. As a result, the borough is experiencing “retail leakage,” meaning that residents are spending their dollars in other boroughs and in other states instead of the Bronx. She said she also sees value on the Bronx waterfront.