The Bronx retail sector experienced a 24% decline in dollar volume compared to 2023. Totaling $114.9M in dollar volume, and only 2 fewer transactions compared to 2023. Despite the decline in both dollar and transaction volume, the price per square foot rose to $476 per square foot, a 7.7% increase. Retail pricing metrics are still not nearing the $532 per square foot highs of 2021 and 2022. Notably, the most expensive retail transaction in 2024 came via a foreclosure sale on March 29th, 2024. 151 East 170th Street, a single-story, 8-unit, 9,700 SF retail property traded through foreclosure for $8,600,000 or $881 per square foot. The auction sale price was set at $7,500,000. The second most expensive transaction in the retail sector, 125 East Fordham Road, was purchased by Moshou Parkway LLC for the highest retail price per square foot of the year at $1,250 per square foot. The prime location with 123 feet of frontage along the major E. Fordham road retail corridor and 1 block from the subway most likely contributed to the increased price per square foot. The purchaser also owns two multifamily assets within a few blocks of the asset. According to RM Friedland's Q3 2024 Bronx Retail Leasing Report, the overall availability rate for Bronx retail space decreased to 6.39% from a relatively steady approximate 9% availability rate over the last 3 quarters. 2H'24 Featured Transaction Fordham 125 E Fordham Road Amount: $8,000,000 $/SF: $1,250 Buyer: Moshou Parkway LLC Seller: Louis Reichardt Holdings Sale Date: 8/29/2024

The Bronx industrial sector continued its decline in 2024, with dollar volume dropping 46% to $118.2 million and transaction volume falling 29% to 25 trades. This represents the lowest dollar volume since 2014 and the lowest transaction volume since 2011. Despite the downturn, the price per gross square foot climbed to $471, and the price per lot square foot increased slightly to $255. However, these figures were skewed by a single notable sale: 891 East 135th Street, the largest industrial trade of the year. The property sold for over $12.5 million ($712 per gross square foot) to Waste Connections from Royal Waste Property Holdings, likely reflecting its value as a fully built-out facility for waste services, a strong fit for an owner-user. According to Cushman & Wakefield, industrial leasing activity across the Bronx, Brooklyn, Queens, and Staten Island reached 2.2 million square feet by the end of Q3 2024, matching the total for all of 2023 in the outer boroughs. However, vacancy rates rose to 5.1%, surpassing 5% for the first time since 2020, highlighting ongoing challenges in the market despite robust leasing activity. 2H'24 Featured Transaction Port Morris 891 East 135th Street Amount: $12,628,459 $/SF: $712 Buyer: Waste Connections Seller: Royal Brothers Bronx Realty Company LLC Sale Date: 9/3/2024

The Bronx experienced a 39% increase in dollar volume and a 7% rise in transaction volume in 2024, driven by major initiatives like the Bronx Metro-North Station Area Plan, approved in August. This rezoned a 46-block area around four future Metro-North stations: Hunts Point, Parkchester/Van Nest, Morris Park, and Co-op City. Other key drivers included the introduction of 485-x and the extension of vested 421a development sites. Development sales in the Bronx reached $363.1 million, accounting for 30% of the borough's total dollar volume across asset classes in 2024. Both dollar and transaction volumes were the fourth highest ever recorded in the borough. One notable sale reflecting the impact of 485-x is 36 Bruckner Blvd, brokered by Ariel Property Advisors and sold by Yates Restoration Group to Ravami for $9.85 million ($131/BSF). The site is expected to house 99 residential units and retail space, a trend likely to grow as developers aim to avoid wage mandates tied to 100+ residential unit buildings. New building filings in the Bronx surged 112% year-over-year in Q3 2024, totaling 53 filings, compared to a 5% citywide decline. This uptick, driven by the 421a extension, anticipation of 485-x, and the borough's affordability, pushed the price per buildable square foot to a record $107, up 9% from 2023, signaling growing demand for vacant land. 2H'24 Featured Transaction Port Morris 36 Bruckner Boulevard Amount: $9,850,000 $/SF: $131 Buyer: Ravami,LLC Seller: Yates Restoration Group Sale Date: 9/26/2024

Bank Lenders Banks maintained a strategic focus on depository relationships to strengthen and optimize deposit, reserve, and liquidity ratios. There has been a noticeable shift in leadership as incumbent banks addressed or resolved legacy multifamily loan portfolios. Efforts have intensified in commercial, industrial, and bridge lending, with a reduced emphasis on multifamily term loans, particularly within the RS subasset class. Agency Lenders Agency lenders remained active in 2024, providing financing for market-rate, workforce, and affordable housing nationwide. However, recent market distress has prompted revised underwriting standards, emphasizing the physical condition of collateral and enhanced due diligence, particularly for older properties (pre-1970s multifamily) and assets in tertiary markets. Rate buy-downs enabled borrowers to secure financing below market rates, effectively increasing loan proceeds. CMBS Lenders The commercial mortgage-backed securities (CMBS) market sustained robust growth through the end of the year, driven by full-term interest-only payments and more flexible underwriting standards compared to FNMA and Freddie Mac. For multifamily assets, leverage reached up to 70% LTV at a 1.20x DSCR on interest-only payments, with a minimum 8.5% debt yield. Spreads have narrowed significantly. The 5-year product remains a preferred option for investors seeking shorter defeasance periods to minimize prepayment penalties. Debt Fund & Bridge Lenders Activity in the debt fund and bridge lending space increased significantly, bolstered by multiple Federal Reserve rate cuts and heightened scrutiny on regulated lenders. The narrowing rate gap between bridge and permanent financing, driven by falling short-term indexes (e.g., Prime, SOFR), has enhanced the appeal of bridge loans due to their higher proceeds, simplified underwriting processes, and prepayment flexibility. Preferred Equity & Mezzanine Debt Banks have adopted a highly selective approach to construction lending, prioritizing markets and sponsors with strong track records and established relationships. Bank construction loans are still available, with spreads starting at SOFR + 300 and underwriting increasingly focused on rental fallback scenarios. Many lenders view the current environment as an opportune time to support construction lending, particularly in supply-constrained markets where the development pipeline has significantly contracted. Non-bank debt funds have gained market share in the institutional $50M+ loan segment, as regulatory constraints limit depository institutions' exposure to HVCRE loans. Preferred Equity/Mezzanine Lenders Subordinate capital providers have exploded in relevance since the banking crisis and run-up in interest rates allowing for preferred equity and mezzanine debt investors to fill in the shortfall in the capital stack. Subordinate capital is available for both new acquisitions and recapitalizations for distressed opportunities. Senior lenders can often view a Preferred Equity or Mezzanine Lender as a "credit enhancement". furthering the likelihood that they consent to subordinate financing.

A number of macro-economic indicators affect the bottom line of commercial real estate investments in New York City and, in turn, the pricing and demand for these assets during any given period. Ariel Property Advisors' Research Division tracks national and local metrics to identify key market drivers influencing the real estate industry. A number of macro-economic indicators affect the bottom line of commercial real estate investments in New York City and, in turn, the pricing and demand for these assets during any given period. Ariel Property Advisors' Research Division tracks national and local metrics to identify key market drivers influencing the real estate industry.

Ariel Property Advisors has been a regular contributor for Forbes. Here is the list of the five latest articles. 12/17/2024: 'Yes' In My Backyard: NYC's Rezoning Ushers In New Era Of Housing Development Local lawmakers took a major step toward solving New York City's housing crisis by approving a rezoning initiative called the City of Yes for Housing Opportunity. 11/25/2024: One Million Reasons Rents Are High In New York City Rent regulations reduce the housing supply and push rents to new heights as newcomers, young people and others compete for NYC's 1.1 million free market apartments. 10/22/2024: New York City Office-To-Residential Conversions: Here's What We Know The sale of NYC office buildings suitable for conversion to housing accounted for approximately 25% of the $2.2 billion in development sales citywide in 1H 2024. 9/13/2024: New York City Transaction Volume Poised To Rise: Here's The Opportunity With mortgage maturities forcing sales, real estate prices falling and fresh capital entering the market, NYC is expecting a surge of trades at attractive prices. 8/7/2024: 3 Drivers Behind The Surge In New York City Investment Sales Three drivers contributed to a pickup in New York City investment sales in 1H 2024 resulting in $11.79 billion in trades, up 26% from 2H 2023.