First Quarter Bronx Benchmark Review

3824 White Plains Rd, Bronx NY

Developers, landlords and tenants all got something out of the New York State budget passed earlier this month. Although nobody is satisfied, investors in The Bronx real estate market welcome the relaxation of onerous regulations that are restricting the supply of affordable housing. Incentives for developers have begun to support valuations of certain sectors while legacy apartment valuations continue to suffer under regulatory pressure.

The light we saw at the end of the tunnel last quarter hasn’t turned into an oncoming train, nor has it gained much strength. With a few exceptions, most of the adjustments to our valuation benchmarks have been lower. Higher interest rates are smothering the macro economy, resulting in weaker lease rates.

Sales transactions and market value rose from last year’s first quarter, and the overall average price per square foot hovered at cycle lows. Stronger numbers were limited to certain commercial categories as residential sectors continued to deteriorate. We made modest adjustments to our benchmarks reflecting the pressure in residential sectors and a couple of anomalous upgrades. 

Our valuation benchmarks give you a true view of the market resulting from a qualitative analysis of public and proprietary sale and lease data that excludes related party and outlier transactions. In these trying times for Bronx real estate investors, following are the latest updates to the valuation benchmarks.

Residential Sectors

1706 Fillmore St, Bronx NY
Three unit multifamily at 1706 Fillmore St in Van Nest sold on February 9, 2024 for $910,000, $450/sf.

Our recent Multifamily post highlighted the troubled commercial apartment sector where only a few transactions occured in the first quarter, mostly at distressed values. The single family and small multifamily markets also suffered under higher rates and the middle class flight from New York. We trimmed our Single Family Silver and Gold benchmarks by $25 and $50 per square foot respectively. The Bronze benchmark remains unchnaged and slightly below the first quarter average.

The Multifamily 2-4 Gold price per unit benchmark was reduced to $375,000/unit to bring it close to the first quarter average. Other category metrics remain unchanged with the Bronze metrics slightly above first quarter averages while Silver and Gold are slightly below. Although demand has cooled, personal housing remains in short supply.

Single Family

Asset ClassPrice / SF
SF Bronze$275
SF Silver$375
SF Gold$550

2-4 Unit Multifamily

Asset ClassPrice / SFPrice / Unit
MF Bronze$250$300,000
MF Silver$325$325,000

Commercial Apartments

Commercial housing is a different story as apartment valuations continued to weaken for all the reasons highlighted last quarter. The NY State Budget passed earlier this month is an acknowledgement of the problems, if not a beginning of the solution. Landlords will now be able to raise rents to cover up to $30,000 of improvements instead of the $15,000 limit set by the 2019 HSPTA, and higher in some exceptional cases. It will hardly be enough to reverse the warehousing trend where landlords can not afford to upgrade apartments because the permitted rent is decades old, so they keep the units off the market. 

The regulatory environment almost caused a failure at NY Community Bank with its heavy exposure to low income housing. The crisis was narrowly averted by an investment from former Treasury Secretary Steven Mnuchin who decided to take advantage of the depressed valuations and buy The Bronx. We take hope from those signals, but our benchmarks reflect trends in place which are still negative. We have been reluctant to chase valuations on forced sales, choosing to advise patience and only sell if necessary. The ongoing deterioration is worse in the Elevator Apartments category with recent averages below our reduced benchmarks of $150/sf and $125,000/Unit. The unchanged Walk Up Apartment benchmarks are also above the first quarter market averages.

Commercial Apartments

Asset ClassPrice / SFPrice / Unit
Elevator Apartments$150$125,000
Walk Up Apartments$200$150,000

Other Commercial Sales

Development demand is ready to take advantage of the new 485-x program that passed in the budget agreement. Projects that set aside up to a quarter of new units for people who earn as low as 60% of the area median income (AMI) will get a tax abatement for up to 40 years. The difference from 421-a is that these units would be permanently affordable which will limit the terminal values that banks will finance. 

A handful of first quarter Industrial sales were in R5 and R7 zones making residential conversions the probable highest and best use. Despite the apartment horror stories, there is still a market for new construction that is regulatorily compliant and with free market rents. Development demand is forcing warehouse users to compete for depleting space. Our increased $350/sf Industrial benchmark is below the first quarter average.

1705 Taylor Ave, Bronx NY
Six apartments and one commercial unit sold on March 21, 2024 at 1705 Taylor Ave in Van Nest for $1.35 million, $261/sf.

Mixed Use commercial rents aren’t subject to HSPTA but the apartment rents often are. Mixed rents have advantages but apartment valuations are hurting this category too. Our $25 reduction in the benchmark price/square foot leaves it above the first quarter average.

Retail property values also enjoyed a development tailwind with most of the quarter’s deals in R5 zones or denser. Like the Industrial category, the $25 increase in the Retail benchmark leaves it below the first quarter average.The featured image atop this post is a single story R6 in Williamsbridge that sold for $469/sf in March. Proximity to the 2 & 5 subway lines serving the east and west sides of Manhattan enhances its developent value.

Reducing the Office benchmark by $25 was not driven by the quarter’s single small transaction that was part of an assembledge. Pressure in our Office lease data confirm the post pandemic downtrend where $325/sf represents a more realistic level.

The Specialty category was skewed by HDFCs trading high and gas stations trading low. The former was more powerful, pushing the first quarter average above our unchanged benchmark.

Transaction counts, traded market value, and average price per square foot of vacant land all rose above last year’s first quarter. Developers must have known about the propects for Albany’s return of 421-a and it’s new cousin, 485-x. However, enough deals sold near the low end of our range to maintain the benchmark for now. 


Asset ClassPrice / SF
Mixed Use$275
Asset ClassLow P/SFHigh P/SF
Vacant Land$50$1,000

Bronx Commercial Lease Rates

The Fed might be done raising the overnight rate, but higher ten year Treasury rates are driving commercial loan rates back near the highs seen last fall. Pandemic level deficit spending is driving market rates higher and smothering the macro economy. Entreprenuers are having a tougher time finacing their businesses, and we are seeing more leases signed at rates below our benchmarks.

Silver Retail leases have held up better than Bronze while landlords hold the line on Gold spaces. The $10 spread between the three has widened to $20 with Bronze Retail leases now available at $40/sf, Silver was trimmed to $50 and Gold remains at $60.

The timeless efficiencies of a workforce working together have been forgotten in the work from home craze. It could be an opportune time to sign a long term office lease in a market leaving the sector for dead. Like Retail, The Office Lease spread has widened from $10 to $20 with Bronze leases available at $20/sf, Silver has fallen to $30 and Gold remains at $40.

Macro economic weakness was a greater force than depleting supply of industrial space in the first quarter. Seeing more leases signed in the high teens, we reversed last quarter’s increase and trimmed our Industrial Lease benchmark back down to $20/sf.

Gross lease Benchmarks

Asset ClassPrice / SF
Retail Bronze$40
Retail Silver$50
Retail Gold$60
Office Bronze$20
Office Silver$30
Office Gold$40

Reforming Regulatory Reform

Gov. Hochul called the budget deal “the most comprehensive new housing policy seen in our state in more than 30 years,” but industry reactions have mostly doubted it would meet New York’s demand for rental housing.

The Real Deal reports that landlords are urging the Rent Guidelines Board (RGB) to approve enough of a rent increase to cover rising expenses when they meet this week. The Real Estate Board of New York noted that RGB increases have averaged only 1.3 percent a year for a decade, while the RGB’s expense growth metric grew by 4.9 percent annually. Jay Martin, leader of the Community Housing Improvement Program said “It looks eerily similar to the financial problems buildings faced in the 1970s and 1980s.” Too many owners found the solution then was to burn down their buildings and collect insurance.

Tenants were given a small victory with limited good cause eviction and a right to renewal in certain circumstances. Both policies will further damage the apartment business model and restrict the supply of workforce housing.

Owners of development properties have the political forces incentivising  modern housing on their side. However, owners of legacy apartments still suffer under higher regulations and less opportunity to raise rents.

Whether you are interetsed in new product or old, please consult our Valuation Benchmarks for all of your Bronx real estate considerations. Also check out our other content to give you a fuller understanding of The Bronx real estate market.

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No other source besides provides such timely and valuable market intelligence to guide brokers, operators and investors in The Bronx real estate market. 

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Featured Image: 4,000sf single story retail zoned R6 at 3824 White Plains Rd in Willimasbridge sold on March 14, 2024 for $1.875 million, $469/sf.

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