Very few units have hit the Spring market.
is one of them.
Nearly everything was in contract by the time the word spread; the west chelsea adherents snapped up the units quite quickly.
My feeling on the building was that it attracts a narrower band of buyer than is typically meant to be drawn to new development.
Primarily, the lack of a full-time doorman presents the main issue.
Finishes are gorgeous and the location is quiet and quite lovely, along with the charm of higher ceilings, and that the buildings are over 100 years old, with a green park across the street.
But the monthly charges create some concern- Over $2 per square foot- $1980 per month for a one bedroom apartment, for instance.
These costs are moving in one direction, readers.
Up.
Live across from a park, for a decent price?
The next project which I was fortunate enough to get into- I say only half jokingly, given the challenge of finding an appointment time- was the Citizen, 124 West 23rd Street, another development in Chelsea.
While the higher floor two-bedrooms are interesting, and certainly the product will sell- the issue which I see here is that the pricing has already baked in for a stretch of west 23rd (between 6th and 7th avenues) which is still on its way up.
I happen to have a client down the street from this site, and have watched it grow.
The developer (Anbau) has done an attrractive honey-brick facade, which is both greener, and in line with what buyers seem to prefer.
I hope that the infrastructure is well done, contrary to much of what was built in 2003-2007.
But I “get it,” about the pricing.
Since the question from most buyers who are looking at new development is whether I feel this is properly priced for what it is, I should walk you through the thought process.
We seem to be in a time where developers and sellers feel emboldened to test the market aggressively.
Pricing in the $1300-1400 per square foot is not shocking anymore, nor is it limited to the most prime addresses.
So when I see 927 square foot units on low floors asking $1.25mm ($1350/square foot), I understand the pricing logic.
Resale condominiums of the last generation new condos are getting $1000-1100 per square foot without much fight from buyers- otherwise, buyers will have to settle for the mid-80’s and mid-90’s condominium, which, if renovated, may still fetch over $1000 per square foot if well-located.
With that
in mind, a developer sees $1200-1300/sf range as a bit of a discount (!), given the risks involved with beginning a development back in 2009 when the world looked like it was ending by many accounts.
Now that the world is still here, buyers bring a slightly different mindset to the table- pushing for discounts on some of the typical extra expenses of purchasing in such a building- the additional 2-3%
cost on seller taxes that are, by default, passed to the purchaser in these cases.
Hence, an asking price, and sometimes a sale price, will be in the $1300+ range.
Of course, I am writing about a baseline cost, where two-bedrooms can ask much more, and 3+ bedrooms soar in pricing.
My answer on value in these cases is based on the monthly carrying charges a building has, a strong look at amenities, the quality of finish, strength of the developer, and a sense of the future prospects of the location.
Perhaps it boils down to this question: Do I feel that a one bedroom property asking $1250/square foot today will be worth $1500-2000 per square foot in 5 years?
If larger units hitting the market now- 120 e 79th, for instance, askinng $2800-3500 per square foot, 15 CPW asking $3000-10,000 per square foot- how far down will this trickle?
I’ll end this post thinking about Harlem.
I think Harlem is amazing, personally.
The avenues are broad, the older housing is striking, many of the blocks are lined with trees and beautiful brownstones, much like chelsea, fort greene, or the Upper West Side.
Access to transportation is good as well.
That said, it’s been gentrifying for many, many years- and I have not seen enough really strong new development product to keep up with the expectations of buyers who are considering a move to the area.
Recent visits have confirmed a few things.
First, the product delivered pre-Lehman was, for the most part, very average.
Construction quality was not great- and I understand that if costs of everything but land is about equal across the city, the difficulty in justifying delivering a top-notch product- pricing remains in the $500-750 per square foot range- much closer to the lower end of the range.
The biggest draw can be lower common charges- with 15- and 25- year tax abatements.
The return on rents, however, despite the lower pricing, remains about 3-3.5%.
So harlem remains an affordable delight for the primary user, and a pioneering spirit- and until we get some more “knockout” product, I’ll remain wary- and make strong positive recommendations on a case by case basis.
Second, I’ve started to come around on the East Harlem area, carefully watching the changes in the area.
Third, anything near a hospital or university should be given extra consideration.
This includes Columbia, New York Presbyterian, and far beyond.
Lastly, a doorman remains a positive in all areas, when considering new development.
It is rare when a lack of doorman is a plus (think Tribeca or the Village).
Only when the buildings are very small do the cost savings justify the lack of that amenity.
Otherwise, attended lobby is key to an easy exit strategy (a sale in the future).
Have a great tax-time!
More to come soon.