The multifamily development market in Westchester County has been booming in recent years, but developers are becoming increasingly concerned about the influx of units.
The skepticism was palpable at a recent event held in the county by Bisnow, according to the publication. The supply and demand economics of the market appear to be shifting as a result of the ceaseless desire for more multifamily units in the county, a short train trip on the Metro-North to New York City.
“From an investment standpoint, there are thousands of units coming online. There’s a lot of competition,” said JLL senior managing director Steve Simonelli. “There’s going to be some concessions. The uncertainty is very hard to underwrite.”
To Simonelli’s point, more than 12,500 units have been delivered in the county since late 2021. Another 15,000 units are in the pipeline, according to a report from RM Friedland. Inflation has tempered the pipeline and limited oversupply, to some degree.
Major developers decamped to Westchester to take advantage of the moment. RXR, the master developer of New Rochelle’s downtown district, has already built four properties that combined have more than 1,000 units.
Most of the development is concentrated in the county’s four largest municipalities: New Rochelle, White Plains, Yonkers and Mount Vernon. Other parts of the county are resistant to new development, panelists said.
Not every developer who attended the event was as fearful about the direction of the market. Titanium Realty Group CEO Diego Hodara — who is more focused on New Jersey but has expanded to Westchester — said the fundamentals in Westchester are strong, especially if New York City remains in a state of undersupply.
NRP Group senior vice president Jonathan Gertman disagreed, noting interest from both residents and lenders was stronger elsewhere.
“If you were coming in as an investor, blank slate, no roots anywhere in the country, and you said, ‘Where would you want to invest as a multifamily developer, builder, investor, for the next 10 years?’ 9.9 out of 10 people would not choose this region,” Gertman said.
— Holden Walter-Warner
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