‘Explosive’ growth in multifamily development seen in Westchester/Fairfield
A new report from Harrison-based real estate brokerage RM Friedland characterizes the growth in multifamily development in Westchester and Fairfield counties as “explosive,” and forecasts more to come.
“With the ongoing migration from New York City, we anticipate multifamily development in the suburbs will reach a high in the next two years,” said Sarah Jones-Maturo, president of RM Friedland. “An important trend that emerges from our report is the critical role that the explosive growth in multifamily development plays in the Westchester-Fairfield real estate markets.”
The report, “New York and Connecticut Development Activity,” examined 7,464 development site sales which took place in Westchester, Putnam and Fairfield counties, as well as in the Bronx, Manhattan, Brooklyn and Queens, from 2010 until the third quarter of 2020. The development sites spanned all product types, including multifamily, commercial and industrial.
According to the analysis by John Barrett, Westchester/Putnam specialist and senior vice president of the company: “Coming out of the great recession, local municipal governments that had previously looked unfavorably on high density, vertical development began to accept that it was needed to prop up municipal finances and keep the housing stock affordable for future generations.
“As a result,” Barrett continued, “national developers such as Lennar, The Southern Company and Trammel Crow, along with local developers, are remaking the skyline and waterfront of Westchester. In addition, some cities have adopted a form-based zoning that allows the process of redevelopment to move at a quicker pace, something that helps the development process.”
Barrett noted that some office parks along the I-287 corridor are being transformed into mixed-use communities that include retail, hospitality and luxury residential rental units in Harrison and White Plains.
Some abandoned waterfront properties along the Hudson River are being converted to mixed-use communities in Tarrytown, Sleepy Hollow and some of the other towns with river frontage. He ascribed importance to increased interest in transit-oriented development in Yonkers, New Rochelle and White Plains.
With respect to Putnam, Barrett said that a lack of municipal water and sewer systems contributes to lower levels of interest from developers outside the region.
“With that said, however, 2019 was the county”™s most active year in terms of overall number of sales volume,” Barrett wrote. “We anticipate that as remote work continues and people migrate out of the urban environment, residential development in Putnam County will become increasingly more popular. The county is aware of the need for infrastructure improvements and is actively pursuing a buildout.”
Broker Alison Luisi reported that in the last five to 10 years, there has been a divergence in trends in the Fairfield County commercial investment sales market.
“While pricing in multifamily, senior living, mixed use, and industrial has increased, the retail and office market sales trended lower,” she said, adding that new development in Fairfield County has been in high demand due to two key factors.
“One is an increasing and underserved aging population that has caused a demand for more senior living facilities. Second, the increasing population in New York and ensuing shortage of affordable housing has developed into an influx of demand for multifamily particularly in lower Fairfield County. The most sought out area is currently lower Fairfield County along the I-95 and Merritt Parkway corridors,” Luisi”™s analysis said.
Luisi noted that where Fairfield has lower taxes relative to Westchester, yet has quality school districts, demand for real estate has been comparatively strong.
With respect to New York City, the RM Friedland report saw overall softening of the market in Manhattan and Brooklyn while Queens and the Bronx were becoming more attractive.