In just 10 years, the gritty, industrial wasteland that was Manhattan’s West Chelsea has become the hottest multifamily market in the US. And there are takeaways for other markets around the country ready to embrace urban infill.
1) If you rezone it, they will come.
The City of New York rezoned more than 20 square blocks from 16th to 30th Street near the just-opened High Line park to residential on June 30, 2005, prompting 20 sales over the next 18 months, 13 of them development plays, says Massey Knakal’s Brock Emmetsburger (showing off his Friends of the High Line membership card).
2) Recognize the recession as a blip…
Building trades kept up that pace until ’09, when only two properties traded, Brock tells us, but the properties that had come out of the ground before and during the recession and recovery provided comps that inspire hefty investment now. Units in Related’s Caledonia (which we snapped) and Cape Advisors’ 100 Eleventh Ave are reselling for well above $2,000/SF, and Youngwoo & Associates’ 200 Eleventh is reselling for almost $3,000/SF. That drove the $850/buildable SF sale of a gas station at 239 Tenth Ave. That’s 50% more than land ever had sold for in West Chelsea.
3) … and pay attention to supply and demand.
Despite the hefty price/SF in the submarket, only 201 condos are under construction, including the 32-unit 500 W 21st (rendered above). That’s making even mid-block properties into a hot commodity, hence the $813/buildable SF sale of 455 W 19th St, which Massey Knakal recently brokered. (If only middle children could feel so appreciated.)
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