A developer planning at least two residential projects in Gowanus has cast its focus on another fast-emerging area of the city, the South Bronx. 

The Domain Companies revealed it has purchased two development sites in Mott Haven for nearly $40 million and plans to raise a pair of rental buildings on the sites with around 450 units combined, ground floor retail space and parking.

The company acquired 445 and 414 Gerard Ave. for $38.5 million and plans to begin building by the end of the year. The sites are currently home to low-rise warehouse properties but can accommodate about 430,000 square feet of new development,  

“We see this area as having characteristics of an earlier Long Island City or Williamsburg,” said Matthew Schwartz, co-CEO of the Domain Companies. “Mott Haven’s transportation access is not good, it’s great. It has access to park space and the waterfront and it has a lot of momentum with Brookfield and other developers planning projects in the area.”

Last year, Brookfield Properties, purchased two large development sites along the Harlem River for $165 million with plans to erect two rental buildings with more than 1,000 units combined. Another development firm, the Lightstone Group, bought two development sites on Exterior Street for nearly $60 million in February to build a 2,000 unit apartment project. 

Schwartz said that 25% of the units in the two buildings he is planning would likely be reserved for affordable housing so the projects can partake in the state’s Affordable New York plan, which grants developers property tax breaks in exchange for a component of affordable apartments. The sites are also both contaminated from past industrial uses and would be remediated using the state’s brownfield program, which grants developers tax credits for cleanup work. 

The Domain Companies has grown its New York portfolio in recent years. It developed a rental apartment building at 1133 Manhattan Ave. in Greenpoint in 2015, and in 2017 and 2018, it acquired three development sites in Gowanus, which is undergoing a rezoning to allow for denser residential and mixed use space. 

“Awareness is increasing around the South Bronx,” Schwartz said. “It will have great-quality apartments convenient to employment centers in the city, but at a relative discount to other neighborhoods.”