Multifamily Tuesday: How High Line Resi Revolution
The land rush that has made West Chelsea one of the hottest multifamily markets in the country is less than 10 years old. Here are the key deals that drove the stampede and where prices stand now.
Massey Knakal’s Brock Emmetsberger (showing off his Friends of the High Line membership card) tells us 20 property sales (13 of them development plays) occurred in the 18 months after the West Chelsea District rezoning on June 30, 2005. The plan changed zoning from 16th Street to 30th Street and Tenth Avenue to the Hudson River (plus a few streets between Ninth and Tenth) from commercial to residential. (If you're a mattress store, it was an easy transition.) Among the success stories was Related’s eight-month sellout of the 190 Caledonia condos at 450 W 17th St (which we snapped, below). That momentum chugged along until the crash, and then only two properties sold in ’09.
A few projects delivered during the downturn and recovery, including Spiritos Properties and Klemens Gasser’s eight-unit Metal Shutter Houses at 524 W 19th St in ’09, Cape Advisors’ 100 Eleventh in ’10, and Youngwoo & Associates’ 200 Eleventh in ’11. Metal Shutter units sold for $2,200/SF during the downturn, and Caledonia and 100 Eleventh are reselling for more than $2,000/SF and 200 Eleventh for almost $3,000/SF. Those and a small pipeline are giving investors the confidence to bid high on West Chelsea developments like the $850/buildable SF Michael Shvo and Victor Homes recently paid for 239 Tenth Ave (best known as the gas station-turned-sheep grazing art exhibit a while back). That's 50% more than land ever had sold for in West Chelsea.
This looks like trees claiming the high ground before their inevitable attack on humans. Only 201 condo units are under construction along the High Line in West Chelsea, Brock says: HFZ’s 35-unit 505 W 19th, Sherwood Equities’ 32-unit 500 W 21st (rendered above), SR Capital and GTIS Partners’ 44-unit 551 W 21st along the West Side Highway, Cary Tamarkin’s 15-unit 508 W 24th St, Related’s 37-unit 520 W 28th St, and Black House and Oriel’s 27-unit 522 W 29th St. Considering the lack of supply, even mid-block property is a hot commodity. Hence Massey Knakal's recent closing on an $813/buildable SF sale of 455 W 19th St in March. Air rights are hot, too. The rezoning allows for properties encumbered by the High Line to sell High Line Transfer Corridor air rights, and those have risen from $300/SF to $400/SF before ’08 to more than $500/SF. Brock tells us Massey Knakal has two such deals under contract, and that price point will continue to rise.