New Rochelle's Development Boom Not Limited To Downtown
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New Rochelle has drawn the gaze of many in New York City's commercial development community since it announced a $4B master plan and chose RXR Realty as master developer. But those who think RXR is the only game in the booming town are sorely mistaken.
New Rochelle has 8.5 miles of waterfront, and the city's first luxury waterfront condominiums are under construction from National Realty & Development Corp. The $100M development is eschewing what many consider New Rochelle's biggest advantage — its relative affordability to New York City — and instead going after the trend of empty nesters seeking walkability with luxury as they downsize.
"I expect the people here are going to want to participate in the whole changing of downtown," NRDC Executive Vice President Jerry Birmingham said. "It works for people coming out of the city who want more space, and it works for empty nesters in Westchester."
NRDC is based in nearby Purchase, but Birmingham said he had avoided seeking out developments in Westchester County because of its well-earned reputation for being anti-development. It was not until he heard Mayor Noam Bramson speak about wanting to attract developers, and the subsequent passing of the master plan, that NRDC considered the city.
Originally, NRDC tried to acquire a site in the downtown to build the kind of density RXR is going after, with some buildings reaching nearly 50 stories and bringing 6,000 units and 12M SF to the area. But Birmingham was drawn to the water, where he is building 72 condominiums across nine boutique buildings.
WatermarkPointe would be a success if it had reached 20 sales by this point after breaking ground in the fall, Birmingham said. It has already gotten commitments for 35 of the 40 being built in Phase 1, with the first building not ready for move-ins until October. Phase 2 has been sped up as a result.
"The price point was high," he said. "It wasn’t that just New Rochelle would be a hard sell, but that [they were] paying a higher price point possibly than anyone else in New Rochelle. When you’re hitting the top of the market, you always have to be concerned that you’re not above-market."
Elsewhere in New Rochelle, closer to downtown, ELD Properties has built two apartment buildings and is in active development on two more, all in a mini-neighborhood it has acquired along Burling Lane.
ELD CEO Tony Hammel said it took him three years to get the approval for his first two, The Hammel, since he proposed them before the master plan's expedited permitting process took effect. For his next two, the Millennia and NewRo Studios, it took 90 days.
"To me, now, with this master plan in place, it’s almost like New Rochelle for developers is the new Gold Rush," Hammel said.
Millennia will be the biggest building in his six- to seven-building portfolio, with a robust amenity package and rents more in line with Brooklyn prices — $2,100/month for a 650 SF studio — than with those at The Hammel. But all of the buildings are using modular construction, and ELD serves as the general contractor, meaning Hammel can decide to drop rents if the demand does not materialize.
Demand is robust as New Rochelle has been the fastest-growing city in New York for several years, growing population more than 3% a year. But none of Hammel's towering neighbors have opened yet.
"The city has to increase that growth to close to 5% in order to sustain that supply that’s going to be coming in. I think it can, it’s on pace to do that," Hammel said. "If it’s doing 3.5, 3.6% without the retail components, once those are provided with the tall buildings going up, I think it’ll sustain that."
RXR and Fisher Brothers, which paid a record price for the Bank of America plot downtown that it can build by-right up to 28 stories, have bought into the gold rush. The accelerating permitting process has captured the zeitgeist, and the players already in town are reveling in the glow of being the new development darling.
"I see signs of a groundswell from the development community," Birmingham said. "Within the development community, the quality developers from the region are considering New Rochelle, that’s absolutely true. It wasn’t on the radar before, it is now."
Birmingham and Hammel will be among the developers speaking at Bisnow's New Rochelle: Best of Both Worlds event Feb. 28.