Subject: The Tale of Three Harlems
New York Sun
December 4, 2006 Edition > Section: New York >
The Tale of Three Harlems
BY MICHAEL STOLERDecember 4, 2006
For those who love the dynamism of New York, it was an extraordinary day on Friday with the topping off, on Central Park North, of a new condominium project that is part of what is often called the Harlem renaissance. As the rain clouds cleared, a wonderful view came into focus: the green elegance of the park to the south and one of the most fascinating real estate stories in the city to the north.
Can it be true that everyone wants to live in Harlem? It depends. There are three distinct neighborhoods East, Central, and West Harlem. By geography, East Harlem begins on 96th Street and runs to 135th Street between the East River and Fifth Avenue. Central Harlem encompasses 96th Street and Fifth Avenue from Morningside Park to East 125th Street and St. Nicholas Avenue between 125th and 155th streets. West Harlem is between 110th and 155th streets from St. Nicholas and Morningside Park to the Hudson River.
There are residential condominium developments in various stages of construction all over Harlem. In the heart of Central Harlem, the topping off ceremony was at 111 Central Park North, a joint venture of the Athena Group and the City Investment Fund LP.
It's a luxury 20-story condominium project comprising 48 residential units, with approximately 9,500 square feet of ground floor retail space and 48 condominium parking spaces. All apartments are on the park, and virtually all have balconies or exterior space with views of Central Park North. The building, on Lenox Avenue and Central Park North, has great transportation, with the subway less than 50 feet from the entrance. Times Square is less than a 10-minute subway ride away.
"Approximately 30% of the units have been presold, including a complete floor of 5,200 square feet, for $6.6 million, or approximately $1,200 per square foot," the president of the Athena Group, Louis Dubin, told my class at the New York University Real Estate Institute last week. He said that "for the first time you can purchase your dream apartment on the park and have your car in the garage below. Parking space condominiums are expected to sell at a starting price of $75,000."
"Breathtaking" is the word Mr. Dubin used to describe the view of Central Park from the residents' lounge and terrace. He told my class that his group was in discussions with what he called "major luxury food markets," which he said are scarce in the immediate area. He also said a number of banks and drug stores are interested, though he said the group prefers "to provide the infrastructure of a gourmet foods market for the new owners and the community.
"It struck me as an illuminating comment about the changing scene in Central Harlem."
The initial response from the public has confirmed the partnership belief in the quality of the location even in a more difficult overall condominium sales market," the president of the City Investment Fund, Thomas Lydon Jr., said. "This is a testament to the changing opportunities in Harlem to attract a broader range of buyers from all over the city.""Over the past eight year we have purchased more than 3,000 units in East, Central. and West Harlem," the president of Tahl Propp Equities, Joseph Tahl, told me. "Most of our properties continue to remain as rentals."
The overwhelming majority is affordable housing. In November 2003, the company purchased the Normandy, at 100 W. 19th St. on Lenox Avenue. It converted the building into 25 four-bedroom condominiums of approximately 1,600 square feet, which sold at an average of $1.1 million.
"Harlem continues to steadily emerge as an attractive, affordable, and ‘cool' alternative to other neighborhoods in Manhattan," Mr. Tahl said. "Large apartments in pre-war buildings, with top-of-the-line amenities and finishes, are available for less than half the cost of comparable downtown properties. Harlem has gone from just being cheaper to being less expensive and hot."
"Earlier this year we were able to achieve a price of $1,325 million for a 2,000-square-foot condominium unit in a three-unit building named the Carriage House, located at 124th Street between Frederick Douglas and Adam Clayton Powell," a principal at R&B Development, Jeffrey Bennett, said. "Today we are building two new condominium developments, one being a converted warehouse, a SoHo-type loft building in the Heart of Central Harlem, SoHo North, an 11-unit condominium. Our second project is a ground up building located at 127th Street between Fifth and Lenox, 23 units, ranging in size from 800 to 1,750 square feet with 10 condominium parking spaces projected to sell for $65,000 to $80,000 per space."
Mr. Bennett said, "The profile of the purchaser is residents of Harlem, Europeans, and people from Lower Manhattan, who are getting a big bang for their buck. They are getting the quality of higher end downtown apartments at half the price."
The largest number of residential developments is being built in East and Central Harlem, where the prices of the condominium units are ranging between $500 and $750 a square foot.
One of the first developers of for-sale housing in Central Harlem was Suna Levine, a joint venture of Alan and Stuart Match Suna and Jeffrey Levine. The Renaissance was created under the ANCHOR program of the City of New York, which provided the developer the land for a site at 116th Street and Malcolm X Boulevard at no cost. A total of 240 limited equity cooperative apartments and 70,000 square feet of retail space was created in a lot that had been vacant for more than 20 years. At the time of occupancy in 2001, the purchaser paid approximately $200 a square foot for their apartments. Today, units are being sold for in excess of $500 a square foot."
At the initiative of the New York City Housing Partnership in association with New York City Housing Preservation Department and the New York City Housing Development Corporation, we were able to create a marketable for-sale development in Central Harlem which opened the gates for lending institutions to establish the criteria for pricing for all for sale projects which followed," the principal at Suna Levine, Mr. Levine, said. "This project broke the dam for private lending institutions to finance for sale housing in Central Harlem."
In partnership with Glenwood Management and under the Cornerstone program initiative, which provided the land at no cost to the developer, Levine Builders created the first 80/20 market rate and affordable housing in their development called Hampton Court, on East 102nd Street and First Avenue in East Harlem. This 232-unit mixed-use rental apartment building included neighborhood retail and a Duane Reade as well as a 54,000-square-foot community facility that houses offices for Social Security as well as the Doe Fund and Mount Sinai, all of which bring valuable services and jobs to the community.
Five years ago, the Briarwood Organization built a total of 48 three-family homes on East 116th and East 117th streets on Madison and Fifth avenues. "These buildings sold for between $257,000 to $480,000, and were offered to families whose annual income is between 80% to 130% of the area median income," the president of Briarwood Organization, Vincent Riso, said. "Today these units are selling for $1.2 million."
Recently, Briarwood completed 14 new three-family homes and a total of 111 limited equity cooperative apartments in two buildings on 119th Street between First and Second avenues. All of the units have been sold to families earning between 80% and 130% of the area median income. Mr. Riso said. "Most of the purchasers of the homes and the cooperative are single, educated minority women who were fortunate to be selected by lottery to purchase their units," he said.
Probably the largest purchaser of residential housing and sites is Columbia University, which has announced its ambitious program to acquire and develop housing as well as educational facilities on more than 17 acres in West Harlem. A new campus is planned between 125th and 133rd streets and the Hudson River. A limited number of new residential condominiums are being built in West Harlem.
Due to the slowdown in the condominium sales market, prices for developable land are decreasing slowly. The highest price for land is in West Harlem, with a range of about $175 to $200 a developable square foot. In Central Harlem, prices are ranging between $110 and $150 a developable foot. The lowest are in East or Spanish Harlem, where the prices have dropped to as little as $100 a developable square foot.
More than 40 new condominium developments are in various stages of construction in East and Central Harlem. Many of these are experiencing difficulty in sales. This is due to the increased number of available units, and the distance from subways and other mass transportation.In certain instances, many of the developers have been forced to reduce the prices that they expected to achieve on the sale of the units. Lending institutions are applying the brakes to providing construction financing to developers with limited experience who intend to construct new developments in Harlem. Few new projects will be financed for inexperienced developers who propose developments in remote sites, with limited transportation and the least desirable locations. Developers must be cognizant that Harlem is three distinct neighborhoods and condominiums in Harlem will not fetch $800 to more than $1,000 a square foot unless the development is in a prime location, with excellent sponsorship and unique amenities and transportation.
I have to concur with the chairman of Rubenstein Public Relations, Howard Rubenstein, when he said, at a conference less than 15 months ago, "that there are no bad neighborhoods in New York City," especially with what's taking place in Harlem.
Mr. Stoler, a contributing editor of The New York Sun, is a television broadcaster and a senior principal at a real estate investment fund. He can be reached at email@example.com.
December 4, 2006 Edition > Section: New York >