Multifamily Monday: Four Neighborhoods Making a Comeback
You can count on one hand the communities in NYC where investors can get in at a decent basis but risk has diminished. (That is if you still have a hand, considering most places in NYC cost an arm and a leg.)
1) Upper East Side
Slow construction of the Second Avenue subway hindered development on the UES, but as completion of that project looms, the area has come back into fashion, says The Marketing Directors CEO Adrienne Albert. Long undervalued, the neighborhood's prices have risen to an unprecedented $2,800/SF to $3,000/SF for three-bedroom units.
Eight new and conversion condo projects are under construction, according to her colleague, Laura Tomana. That includes Corigin Real Estate’s 39-unit 535 E 80th St and DDG’s 130k SF 180 E 88th. As is the case in all of Manhattan, developers can earn more money per SF with three-bedroom and larger units, which makes sense considering only the truly affluent can afford to buy in Manhattan anyway, Adrienne says.
South of Chambers, more condos sold in Q1 than in any quarter in the previous 25 years, Laura tells us. Time Equities’ 191-unit 50 West St (DBOX's rendering of the view is above) is the hottest of them all, where, Adrienne tells us, the sales office opened just two weeks ago and absorption has been pedal to the metal.
Silverstein’s 157-unit Four Seasons Private Residences at 30 Park Place (rendered) launched sales just a week earlier. Both projects’ biggest bragging right is the view; 50 West towers over Battery Park City to offer vistas of New York Harbor, and 30 Park Place provides 360-degree views from 926 feet above Church Street and Park Place. Adrienne says there’s demand Downtown for new construction especially, and it’s not likely to ease considering 50,000 additional employees are expected to occupy all the office that’s under construction. (We're gonna need a bigger water cooler.)
3) Long Island City
After loads of resi projects stalled during the recession, young pros and families are flocking to LIC, TF Cornerstone’s Kevin Singleton said at the Long Island City Partnership’s Long Island City Summit last week. At the company’s 184-condo The View and the five apartment buildings the company has put up on the waterfront, TF Cornerstone underestimated the demand for stroller parking, he says (though, should kids really be driving?). And at 4545 Center Blvd (where all 820 units leased up recently), there’s huge demand for the playground. Meanwhile, to fill a hole in demand from young, single pros, TF Cornerstone’s 585-unit 4610 Center Blvd opened earlier this month with mostly studios and one-bedrooms.
We also snapped Rockrose president Justin Elghanayan (flanked by Modern Spaces founder Eric Benaim, The NY Lions Group’s Ray Shirian, Aaron Shirian, and Lions' Albert Shirian) who says the neighborhood is on the verge of a huge condo market. Rockrose is wrapping up development of 2,500 units in LIC’s Court Square, but the last shovel-ready parcel his company owns, 4320 43rd Ave, may go condo. Early in a submarket’s cycle, Justin says, developers go for apartments to take advantage of rent growth. Now, the submarket is ripe for condos. Eric says a 100-unit building that launches sales now would take a year to sell out, and that’s if he paces himself to maximize demand-based price increases.
4) Fort Greene
Fort Greene was the opportunistic place to invest 30 years ago, and now it’s come into its own as a hotspot (sort of like Justin Timberlake). On Friday, we snapped the 1 Flatbush Ave at the corner of Flatbush and Fulton, which, Eastern Consolidated’s Ben Tapper tells us, Capstone and Carlyle Group have just agreed to buy. Air rights bring the buildable SF to 175k, and the $35M price indicates resi development. Behind that property, Dermot’s 42-story, 327-unit 66 Rockwell apartment building is nearing completion. Look for our entire tour of Fort Greene on Thursday in the second issue of Bisnow’s new Special Brooklyn Edition. (Check out the first one here.)