Bronx Registered $4 Billion in Total Development in 2019

John Jordan | December 16, 2020

The Grand Concourse from the Bronx County Courthouse at 161st Street. PHOTO CREDIT: JULIENNE SCHAFER

While the Bronx, and the rest of New York City has been battered by the coronavirus this year, the Bronx, prior to the pandemic, was very popular with investors, registering a very impressive $4 billion in total development in 2019.

Bronx Borough President Ruben Diaz Jr. recently released the “Bronx Annual Development Report” for 2019. The report indicated that 2019 was the best year for new development projects in the Bronx since 2009.

The total development number is an increase from more than $2.7 billion in total development posted in 2017 and $3.48 billion registered in 2018.

In addition, more than 9,000 residential units were developed in The Bronx in 2019, the largest number of residential units added, since Diaz became borough president.

“This report shows not only how far we have come as a borough economically, since I first took office, but what The Bronx could become again after we rebound from this global pandemic,” said Bronx Borough President Diaz.

He continued, “Last year, we continued to attract tremendous interest from all sectors, making that growth work for all Bronxites. Working together with our Bronx businesses, along with our development leaders, community boards, non-profits and elected officials, we have shown that we are capable of achieving great economic growth, making The Bronx a great place to live, work and raise a family.

The “Bronx Annual Development Report” also illustrates the year-to-year investment and construction The Bronx has played host to since 2009, when Borough President Diaz first took office.

The borough has seen more than $23 billion in total investments, up from $18.9 billion in 2018, as well as more than 109.5 million square feet of total development construction since 2009.

Also, a total of 55,295 residential units have also been constructed in The Bronx since 2009, with more than half of those units—27,133—having been developed with government subsidies.

The report broke down the 2019 development activity by category. For example, total investment in the Bronx was $4,189,645,343. In terms of use, residential construction in the Bronx in 2019 was valued at $3,007,868,760, which accounted for 72 % of total investment—the highest annual investment between 2009-2019. Commercial construction in the Bronx in 2019 was valued at $569.3 million, 14 % of total investment and the third highest annual commercial investment between 2009-2019. Institutional construction in 2019 totaled $612.2 million, which was 14 % of total investment, and the second highest annual institutional investment in the Bronx between 2009-2019.

The total square footage developed in the Bronx in 2019 was 12,725,138—the third highest built in the Bronx between 2009-2019. Residential totaled 9,366,244 square feet, followed by commercial at 2,089,362 square feet and institutional at 1,106,386 square feet.

Breaking down the residential development, a total of 9,973 units were added to the borough’s housing stock, including 5,950 unsubsidized units and 4,023 subsidized units.

In a recent market report released by commercial brokerage firm RM Friedland, the firm stated that it has spotted “a clear trend of ‘some of the heat’ being taken out of the Manhattan market and a shift toward investment in the Bronx and the suburbs—with the Bronx being the clear winner.”

The brokerage firm added that Bronx pricing and volume has followed shaky yet steady upward trajectory. The Bronx has seen some of the most dramatic fluctuation in values over the past few quarters.

RM Friedland’s Marco Lala reported that his team, in just the last couple of months, had closed and contracted on more than half a million square feet between $50 – $60/FAR. “We are entertaining bids of $70-80/FAR on a recent listing and even working on a 99-year ground lease for an 80,000+ square-foot site in the Pelham Bay area. We are even flirting with selling air rights on specific scenarios. A phenomenon typically associated with New York City proper.”

Lala, senior vice president and an associate broker with RM Friedland, added that although the rent laws and COVID have negatively impacted income producing properties, the fact that it could take upwards of 12 months to 24 months to prepare to break ground on a development site has created a unique opportunity for those that are bullish on the Bronx’s future. He said this was especially true for sites that can benefit from tax abatements and high-density affordable housing.

John Jordan
Editor, Real Estate In-Depth