Recently, I’ve started working with a national company based in the midwest. Their New York office is located in Westchester County, but they have become eager to relocate closer to the city. One of the places they are considering is in the Bronx.
I thought this was an interesting choice, as I have written previously about how relatively low and stable the rents are in nearby Westchester. My client elaborated that it wants to be in a more densely populated area because of its sales organization; the more people near it, the better off it is. And the Bronx is a great market for their products. Many companies ignore the Bronx for historical reasons and do not realize how the county has grown in influence and spending power—forfeiting what is a valuable territory.
My client is betting on the Bronx becoming the next Brooklyn, which is the hot borough right now for hipsters and orthodox alike. Like Brooklyn, the Bronx is an incredibly compact market. Out of New York’s population of 8.4 million people, 1.4 million (17%) live in the Bronx alone. It is a huge consumer market and with relatively inexpensive entry points.
In the past, conventional wisdom dictated that the demographics in the Bronx do not favor a healthy business climate—that is to say, the median incomes of the residents might lead one to assume there is not much disposable income. But they are still consumers, they do buy many products and services, and the economy is strong right now. A company that would traditionally be out in the wealthier suburbs can take advantage of the Bronx’s proximity to customers, and companies like my client are seeing the value of establishing a foothold in the Bronx and leveraging it.
That's a sea change in what the city represented and what it represents now. Now there is a huge opportunity for savvy companies, and they're taking advantage of it. Personally, I don’t expect the Bronx to be fully onboard during the current real estate cycle, but in the next cycle, I expect it will be poised to be the next place to build and build and build.
George E. Grace
G.E. Grace & Company, Inc.
232 Madison Avenue
New York, NY 10016