The MetroGrid Report: Focus on NYC Submarkets
Focuses on a different New York City neighborhood in each issue, providing micro-level detail on building sales and development. The report lists comps, demographics including retail sales and daytime employment, and highlights a recent sale of a specific building.
The analysis below provides an in-depth overview of the commercial real estate market on the Upper West Side including statistics on sales volume, pricing and top sales in the last year or so. What the data shows is that while Manhattan’s real estate market can be very volatile, investors return to premium yet stable neighborhoods earlier than trendier neighborhoods. As per Chairman and CEO, Peter Hauspurg, “our retail and multifamily deals on the Upper West Side consistently get the biggest responses from investors. In Manhattan, which is already one of the most preferred locations in the world, the Upper West Side stands out as one of the elite markets mainly because of its building stock and its history of being a popular place to live.”
What the findings herein show is that investors value the Upper West Side for its solid residential base and its future upside potential. The area is renowned for its classic pre-war architecture, charming brownstones, desirable public and private schools, abundance of parks, museums, and a wide assortment of cultural institutions. Housing is always in demand on the Upper West Side and developers are eager to build and have, as demonstrated by the more than 7,800 units built since the late 1990s. Finally, while short on offices and hotels, the Upper West Side has added significant new retail over the last few years anchored by Columbus Center on the south end of the submarket and Columbus Square at West 97th through West 100th Streets that brought big box stores to the area in 2010.
According to Peter Hauspurg, Chairman and CEO, “Lower Manhattan continues to amaze me – every time I go there, I notice a new development, major hotel or retail complex. The growth there never seems to slow down, and our buyers’ interest in the area has increased over the last two years.”
With each new development that was proposed, investor interest grew. As the numbers below show, investment sales volume soared in 2005 through 2007 but then stalled in 2008 and 2009. Interest then picked up in 2010 and even more so in 2011 as transaction volume has nearly eclipsed that of 2010, although it has not returned to levels seen in 2007. What is more impressive about Harlem is what is to come: Columbia is expanding its campus by 17 acres and a number of developers have revived their development plans, particularly along 125th Street.
This current edition of the MetroGrid reviews both the sales market and the new developments and shows how this last frontier of Manhattan has stirred so much interest.
In researching the data for this issue of the MetroGrid that covers the commercial property sales market for Chelsea – West 14th Street to West 30th Street west of Avenue of the Americas – we found so many transactions for art galleries and related spaces that we had to separate them as their own property type. And the results show that art-related space in Chelsea indeed carries a premium when compared to most other property types.
The analysis below highlights the performance of the property markets in Northern Manhattan, the area north of 135th Street, river to river.
Because the Village is really comprised of three neighborhoods – Greenwich Village, East Village and West Village – we break down some of the transaction data accordingly. The results reflect the subtle differences between the three neighborhoods.
According to Chairman and CEO Peter Hauspurg, “Everyone wanted to invest in Brooklyn in 2005 through 2007, there were never enough deals for buyers. But the correction hit the borough hard. We’re starting to hear some renewed interest but it is slow going.”
Much has been written about certain pockets of Brooklyn’s commercial real estate market, as some neighborhoods saw considerably more activity in the last decade than others. Even within the neighborhoods, commercial sales by property type differed dramatically. Because so much of Brooklyn’s commercial sales activity was concentrated in the northwest corner of the borough – from Red Hook through Greenpoint – the analysis below focuses on this segment of the borough covering overall activity along with a micro analysis of the property markets delineated by zip code.
The commercial sales market analysis profiled below shows that the Midtown East office sales market took a particularly hard hit between 2007 and 2009, but the market for multifamily buildings and even development sites showed less of a correction due to the stability of the neighborhood’s prime occupants: the international community surrounding the United Nations. Not only does the diplomatic community largely prefer to live close to their place of work, but the recent data reveals how foreign governments have been active real estate buyers, even in 2009.
According to Eastern Consolidated’s Chairman and CEO, Peter Hauspurg, “In 30 years of business, I’ve never seen the office market as quiet as it was in 2009, but still, New York remains a strong draw for the international community and no other neighborhood highlights this fact better than the East 40s and 50s.”