Halstead Property

Richard Grossman
Executive Director of Sales, Downtown
rgrossman@halstead.com
(212) 381-4274

Anna Shagalov
Sr. Vice President
SoHo Office
Tel: (212) 381-4216
ashagalov@halstead.com

With Digs Like These

By: Rachel Morgan

The downtown real estate market is bouncing back with a vengeance. “The downtown real estate market is healthy and growing stronger by the deal” said Eric Zollinger, president of Zollinger & Associates. “In West Chelsea, for example, once-stalled condo projects are coming back to life and being remarketed and sold. Inventory in new developments has been absorbed with resale prices higher than their original contract prices. In the Caledonia, located at 450 West 17th Street and adjacent to the High Line, there were 11 resales in 2010 with an average price 22.52 percent higher than the original sale, with an average price per square foot of $1,616. This sort of measured growth is a strong indicator of the market’s growing strength”.
 
High demand paired with tight inventory seems to describe the downtown real estate market quite well. “The market is great” said senior vice president of Halstead Property Anna Shagalov. “If anything, I just wish there was more inventory.” Nick Gavin, vice president and salesperson at Corcoran, agreed. “Downtown is seeing high demand due to a lack of inventory,” he said.

Richard Grossman, executive director of downtown sales at Halstead Property, said the lack of inventory in tandem with the right pricing is key.“There is a scarcity of properties and many buyers,” he said. “Correctly-priced properties are selling.” The rapid pace of downtown real estate transactions are causing many potential downtowners to see out brokers when finding a residence. “Downtown Manhattan continues to be the most desirable are of the city to live in, hence the low vacancy and inventory rate,” said Omari Toomer, senior associate salesperson at Citi Habitats. “The lack of inventory and high demand are making for an atmosphere similar to three years ago. Both buyers and renters seem to be getting frustrated with the speed and intricacies of downtown (real estate) transactions and seeking out professionals to guide them through the process.”
 

William Matias, senior associate salesperson at Citi Habitats, see similar pressure to secure a good place. “Higher demand and lack of inventory have renters signing leases before their current leases expire in order to secure a good space,” he said.

Corcoran Senior Associate and Salesperson Bernice Leventhal put it simply. “Downtown real estate stands out because not only do we have unique and charming apartments, we also have limited inventory, and what’s rare is desirable,” she said. “People who live here don’t want to leave, and those who don’t live here want to.” When considering downtown, one has to wonder-is the quintessential loft still the most coveted of all the properties? The answer, in short, is yes. “Lofts are always the most coveted,” Shagalov said. Tom Doyles, senior vice president at Sotheby’s International Realty, agreed. “Buyers Love the high ceilings, oversized windows and original detailing of former factories,” he said. “Lofts are hot as well as the new ‘starchitect’ buildings on the West Side. Highway in the West Village and Chelsea.”

But lofts can sometimes only appeal to a certain type of buyer, said Raphael De Niro Managing director at Prudential Douglas Elliman. “Downtown, the loft apartment still reigns,” he said. “It’s not for everyone, but many buyers want those original details reminiscent of downtown’s industrial past.” But lofts don’t always make the cut. “Traditional long, narrow lofts with only front or rear exposures are not as popular as other types of layouts with more square footage and large living and common areas,’ said Bill Grant, vice president and director at Brown Harris Stevens.
 

Confidence Stimpson and Siim Hanha, both senior vice presidents at Stribling & Associates, would call it a draw between classic lofts and high-rise luxury buildings in terms of popularity. “While the new and shiny condos are still highly sought after, artist’s lofts in original or close to original condition are becoming more popular,” they said in a joint statement. “Many people don’t want to live in a building where everybody has the exact same layout, the same kitchen, etc. Also, if you want privacy, you need a full floor with an elevator opening directly into the loft, and these are almost always in smaller buildings.” In terms of what downtown buyers want Shagalov named “open space and high ceilings” as coveted features. “Apartments with large living areas and open kitchens in full service buildings” attract renters, Grant said. Gavin said the most sought after features are “light, charm or volume.” And downtowners are no different in terms of wants or needs.
 

“Space, light and a good price-like everyone else,” said Daniel Hedaya, executive vice president at Platinum Properties. It all comes down to character, at least according to Jeffrey Wachtenheim of TDG/The Real Estate Group. “Lofts and townhouses (are popular,)” he said. “Renovated prewar are always a winner. Mostly things with character.”  In terms of real estate popularity, downtown has always emerged as somewhat of a front runner. When asked why, brokers’ pointed out the neighborhood’s unique feel. “(What makes the neighborhoods unique is) the close proximity of neighborhoods with distinct personalities,” Grant said. “Soho has a totally different feel from its neighbor Little Italy, which is different from Chinatown.” Zollinger also names area amenities as a major draw. “The downtown real estate market is unique because it offers exciting new areas for recreation and entertainment, including the High Line, Hudson River Park, Celebrity architecture and exciting new restaurants,” he said. “These kinds of neighborhood attractions bring buyers because they don’t exist anyplace else.”
 

Jill Mangone, vice president and director at Brown Harris Stevens also said the High Line was a major plus for the area. “The High Line has had a tremendous effect on West Chelsea,” she said. “I think it has humanized what was a desolate and gritty area.” An eclectic group of people is what makes this area hot, some broker said. “there is a juxtaposition (between) young and old, wealthy and middle class, creative types and business execs, all harmonious together,” said meg Siegel, senior vice president at Sotheby’s International Realty. The neighborhood’s unique feature-and neighborhood feel-are what make it enduringly popular some brokers said. “Less density, cobblestone streets, original loft buildings interspersed with new buildings within the context of the neighborhood,” said Kenneth Malian, senior executive vice president and director of sales at Prudential Douglas Elliman. “Downtown still feels like a neighborhood; we have a new Hudson River Promenade unique product, more light and air and terrific public transportation.” Shii Ann Huang, senior vice president and associate broker at Corcoran, also sees a neighborhood-like atmosphere downtown. “There is a real village or small-town feeling about many of the downtown areas that buyers often cite as the reason they are buying in the area, ‘Huang said. “Cobblestone streets and the charm of old New York contribute to that felling. That and easy access to amenities draws in a broad crowd.”
 

As for what’s next for the neighborhood, continued growth seems to be the answer. “With section two of the High Line opening in June and Related’s soon-to-begin Hudson Rail Yards construction, West Chelsea has tremendous continued growth opportunity,” Zollinger said. “The new Avenues School, set to open in 2012, will make downtown an even greater home destination for families wanting proximity to a school on par with Dalton Collegiate and Spence.”Stimpson and Hanja predict growth as well. “(It) will continue to expand eastward,” they said. A plethora of new buildings has also popped up downtown. The Financial District is marked by hot new developments like they Gehry –designed rental building 8 Spruce Street and condominiums developments 99 John, 88 Greenwich, 20 Pine Street, 67 Liberty Street, 75 Wall and the William Beaver House. In fact, some brokers think this area is on its way up. “I really think that FiDi is going to be the next big thing.” Hedaya said. “The value and building quality are really things that will emerge once more conveniences and retailers come down there.”
 

In Battery Park City, the Visionaire and 1 Rector Park are in high demand. Soho boasts the Trump Soho Hotel Condominium with a hefty number of penthouse residences-11 to be exact-and amenities to match. Soho Mews is another luxury high-rise popping up in the trendy hood. Soho’s Jean Nouvel-designed 40 Mercer is also hot. Brokers point to One Jackson Square in Greenwich Village as a standout. Palazzo Chupi is another fan favorite. Developments along the waterfront in Greenwich Village are other marks of the area’s development-like Richard Meier’s Perry Street Condos or Superior Ink at 40 West 12th St. “The Richard Meier towers on Perry Street instigated waterfront development along the West Side Highway,” Grant said.
 

It’s no wonder that potential renters and buyers are flocking downtown now more than ever-with the abundance of shops, eateries and brand-new green space like the High Line, life down south (in Manhattan of course) is looking better and better.

Sunday, May 15, 2011