Steve Lorenzo on Building Retail Foundations in the Bronx's Emerging Markets

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Date:

16 Mar 2025

“People want to live where they can go down to a restaurant, hit a convenience store, do the drugstore,” explains Steve Lorenzo, Principal at Lee & Associates Commercial Real Estate Services. For Lorenzo, this fundamental understanding of community development has guided his work in bringing essential retail to the Bronx’s evolving neighborhoods.

The Retail-Residential Connection

The Bronx is experiencing significant growth. Former industrial areas are developing into residential communities, with developers like Brookfield and RXR establishing presence in neighborhoods like Mott Haven. But residential development alone doesn’t create a neighborhood—retail amenities are the critical missing piece.

“Our message to retailers is that this area is growing. You have to get in early,” Lorenzo emphasizes, describing his approach to convincing national and regional retailers to enter these emerging markets.

Lorenzo has been instrumental in this development, recently completing 35,800 square feet of new retail leases across the Bronx. These strategic placements are reshaping neighborhoods by providing essential services to new residential communities.

Mott Haven: A Case Study in Neighborhood Building

Mott Haven, the southernmost section of the Bronx, exemplifies the development Lorenzo is helping to orchestrate. Once primarily industrial, this area has attracted premium residential developments like Brookfield’s Bankside at the base of the Third Avenue Bridge.

“It’s a Brookfield product, which means beautiful indoor swimming pool… something new to this market. Followed up by RXR coming in and making these new housing products,” Lorenzo explains.

When a Rite Aid location closed in Mott Haven, Lorenzo saw an opportunity to fulfill a neighborhood need. He helped Queens-based retailer Mott Haven Discount secure a 9,500-square-foot, 15-year lease at 537 East 138th Street, marking their first Bronx location.

“We were able to capture that space—120 foot of frontage, main and main market,” Lorenzo notes, highlighting the prime visibility that attracts both retailers and serves new residents.

Similarly, Lorenzo helped IHOP secure a 20-year commitment to its new 4,900-square-foot location at 410 East 189th Street in Fordham. “This is like my sixth deal with them in the Bronx,” Lorenzo says. “They have always wanted to be on Fordham Road near Fordham University. No opportunity has ever really presented itself that they could fit into and work out the economics of, and we found an opportunity just off of Fordham Road on 189th Street and Park Avenue.”

Strategic Visibility and Growth Potential

In these emerging markets, retailers have specific requirements. Lorenzo has observed that tenants are becoming “very selective” in their decision-making. “Normally, you want to get as close to an A or B site as possible. There are not many tenants that are willing to take flyers or chances, so I see the flight to better quality as a trend.”

The length of lease terms in Lorenzo’s recent deals—ranging from 15 to 20 years—speaks volumes about retailers’ confidence in these emerging markets. These long-term commitments are mutually beneficial—they give retailers time to grow with the neighborhood while providing residents with stable amenities that enhance property values and community appeal.

The New Landlord-Tenant Dynamic

The success of these neighborhood developments relies heavily on what Lorenzo describes as a “collaborative environment” between landlords and tenants.

“Landlords understand now more than ever that, especially in their commercial spaces, the tenant’s success is their success,” Lorenzo notes. “They are willing to invest more. They’re willing to sit at a table and see where they have their expertise, whether it be in delivering tenant improvements or delivering more landlord work.”

This collaborative approach is especially vital in emerging markets, where both parties are essentially betting on future growth. Lorenzo explains that deals in these areas must “reflect that they are first to enter,” with arrangements that allow retailers to grow alongside residential density.

Restaurants Embracing Smaller Footprints Empowered by Technology

As these neighborhoods develop some retailers are adapting their approaches based on lessons learned during the pandemic. Most notably, Lorenzo has observed a trend toward smaller retail footprints in the restaurant sector.

“One thing that was taught to the restaurant market during COVID is that they could do as much business, or do a lot of business, in a very small footprint,” Lorenzo observes. “Especially with today’s technology of Uber Eats and the to-go market and the connectivity with customers.”

This technological evolution has fundamentally changed spatial requirements. “Instead of a 5,000 square foot restaurant, you can do it in a 3,000 square foot restaurant,” Lorenzo explains. This efficiency allows retailers to enter emerging markets with lower overhead, reducing risk while still establishing a presence.

Future Developments

Looking ahead, Lorenzo sees promising developments across multiple emerging neighborhoods.

“We have some exciting new projects coming up in the borough markets in Long Island City being one, another one that we’ve launched out in the Parkchester area of the Bronx,” he shares. “Again, similar to what I like to do in those areas that can use better developments and have immediate impacts to areas.”

With new residential developments continuing to rise across the Bronx and upper Manhattan, the demand for strategic retail placements will only increase. Lorenzo’s approach—identifying neighborhood needs, convincing retailers of future potential, and facilitating collaborative deals—positions him to continue shaping these communities.

“I’m really excited about 2025,” he concludes. “It’s going to be a good year.”

For the residents of neighborhoods like Mott Haven, Fordham, and Parkchester who now have access to restaurants, car rentals, and discount stores within walking distance of their homes, the benefits of this integrated approach to neighborhood development are already evident.