Manhattan Condo Development Report

Michael Stoller of The New York Sun reported yesterday on the incredible number of condominium developments that are in or close to the pipeline.

A managing partner at Massey Knakal Realty, Shimon Shkury, says his firm is listing 38 development sites in the five boroughs. Thirteen sites are available in Manhattan, 12 in Brooklyn, seven in Queens, three in the Bronx, and three on Staten Island. Prices range from as low as $48 a buildable foot, on Marcy Avenue and Stockton Street in Brooklyn, to $360 a buildable foot, in Manhattan. 

Stoller’s slant is towards Wall Streeters who are feeling cash rich after big bonuses and may want to try their hand at residential real estate development in the city. 

Stoller’s advice: If diving into residential development in NYC, it is wise to consider consulting or partnering with a seasoned real estate professional with development experience.  Oh yeah…you also need a lot of cash because lenders are less likely to write checks for novice developers or class B development sites.

"There aren’t any real ‘killer’ sites being offered at the moment," the president of SJP Residential, Allen Goldman, said. "In fact, the offerings of large sites suitable for residential development are few in number. I suspect that great sites, which have location, height, and views, would still be asking north of $400 a square foot. ‘B sites’ are showing signs of lower numbers with more urgency to sell, some being offered in the range of $200 a buildable square foot."

Here are some excerpts from Stoller’s article summarizing some of the city’s many new developments:

CHELSEA HIGH LINE DISTRICT

1. 537–545 W. 27th St., opportunity to build 123,000 square feet of commercial or residential space or a community facility building without zoning changes or variances.  By purchasing air rights and using an inclusionary housing bonus, one could increase the size of the development to more than 185,000 square feet.  Real estate experts expect the site to trade for more than $300 a buildable foot.

2.  511–517 W. 21st St. with frontage on both 21st and 22nd streets. A developer can build a 100,000-square-feet building for use as a gallery or a hotel, and industry sources expect the site to sell for more than $500 a buildable foot.

UPPER EAST SIDE, SUTTON PLACE, & TURTLE BAY

3.  305 E. 85th St., with frontage on Second Avenue. The winning bidder has an opportunity to construct a 21-story, 117,663-square foot tower with 4,125 square feet of retail. "The property will probably fetch north of $400 per buildable square foot, partly due to the fact that the project will be breaking ground in the spring, and design and development drawings are 100% complete," Mr. Miller said.

4.  1480 Second Ave. on the northeast corner of East 77th Street will be sold to a developer who plans to construct another condominium as big as 60,000 square feet. The site is expected to trade for about $375 a buildable foot.

UPPER WEST SIDE

5. 210 W. 91st St. between Broadway and Amsterdam Avenue.  A developer can build a 110,682-square foot residential condominium on floors five to 22 that will house 45 residential condominiums at the site of the Young Israel Westside Synagogue.  The synagogue is seeking $16 million for the development site. The price includes completed architectural plans and legal and operating agreements.

6.  20-story residential condominium is planned for 230 W. 78th St. between Amsterdam Avenue and Broadway. The building, a development of Urban Residential Properties, will have 34 apartments.

7.  Construction has begun on a 16-story residential condominium at 120 W. 72nd St. between Columbus Avenue and Broadway. The tower, a development of Anbau Enterprises, which recently completed the conversion of the Intercontinental Hotel at 110 Central Park South, will have 22 apartments.

8.  At the southwest corner of 72nd Street, at 2075 Broadway, a 19-story condominium is rising. The site, directly across the street from Broadway and the 72nd Street subway stop, will have a total of 49,478 square feet of retail on four levels. 

UPPER EAST SIDE

9.  Later this year, the Related Cos .will begin development of a new tower at 200 E. 86th St. on Third Avenue. The 20-story building will have 190 units and 14,000 square feet of retail space.

10.  One block north, Extell Development has already begun construction of its mixed-use residential condominium on the corner of Lexington Avenue and East 86th Street.

11.  Directly across the street is a branch of Emigrant Savings Bank, at 1270 Lexington Ave. The site is owned by Ramaz School, which is planning to select a developer to build a new school and a residential condominium tower on the upper floors.

12.  World Wide Holdings has begun construction at 1425 Second Ave., on the northwest corner of 74th Street. The 30-story tower will also have about 70 residential units and a 44,000-square-foot Equinox Fitness Center.

13.  World Wide has also made an agreement with the city for a 75-year lease of a 1.5-acre site on East 57th Street and Second Avenue, where it will raze the existing schools, P.S. 59 and the High School of Arts and Design, build two new schools, and develop a 59-story apartment tower and a four story band of retail stores.

14.  250 E. 53rd St., the Veneto, a development of the Related Cos. The 32-story tower will have 137 condominium units.

15.  303–307 E. 51st St., directly off the corner of 51st Street and Second Avenue, where Kennelly Development Co. plans to erect a 40-story residential condominium tower with 117 apartments.

16.  946–952 Second Ave. between 50th and 51st streets, another condominium tower is planned.

17.  Directly across the street, at 249–253 E. 50th St., where the restaurants Lutece, Leopard, and Kate Kearney’s once stood, another residential building is rising.

18.  Demolition is under way at 49th Street and Second Avenue, where a developer has obtained financing from Lehman Brothers to build a residential condominium.

Not a shabby list of 18 projects and this isn’t everything.  Check out the Real Deal’s January Development Report.  We are talking about big players like Worlwide Holdings, Eastern Consolidated, Macklowe, Related, and Extell.  It is hard to believe that these companies aren’t proceeding with eyes wide open and feel confident that market conditions will remain strong to support all of this new inventory.  I remain cautiously optimistic only because my past skepticism has continuously been proven wrong.  I still can’t imagine that this influx of condominium units will be absorbed without some sort of significant price correction.  It seems like simple supply and demand and although I believe there remains a pent up demand, I question that it will be enough to prevent a price correction…even in Manhattan.