Carnegie 57 to open in 2013 - Photo: Marylinn K Yee/NYT
A recent article in The New York Times by Vivian Toy discusses the state of New Residential Developemts in Manhattan in 2010 and currently. To her point, applications for new construction fell off a cliff in 2009 and 2010 which may result in a shortage of inventory in the market in 2012 and 2013. Combined effects of the recession, harder to come by financing for both buyers and developers stalled the new construction of residential units, both for rent and for sale. Stall is the right word as there was a drop of 95% in the number of units applied for in 2010 vs. 2008 (approx. 500 vs. 9,500).
NY real estate NYT housing Permit Graph Jan 141 16cover-graphic-popup
Many new developments that were under way stalled during the recession but some have slowly re-emerged and have been selling, albeit at a pace of 5 units per month versus 50 units per month, per the article. While smaller developments around town have recently been finding success from Brooklyn to Manhattan, the pace is far off 2007 and 2008. However it is important to note that supreme sales success has been specific to certain buildings and locations and is not generalized in the market, right now.
Despite the challenges of obtaining financing, NYC’s two major developers Extell, headed by Gary Barnett, and Related have major projects under way. In 2010, Extell began construction on Carnegie 57, a luxury hotel/condo development that by differing accounts will rise 75-90 stories over Midtown West. Park Hyatt appears to have been lined up to manage the hotel, with 210 suites being designed by Yabu Puschelberg (designer of the Superior Ink Townhouses). Extell also tapped French Architect Christian De Portzamparc to design the building. The 136 deluxe condos however won’t be ready until 2013.
Further south, Related’s massive full-block 60 story tower at 440 West 42nd Street rose steadily in 2010. Heralding what will most likely be the anchor building for the Far West 40s and Hudson Yards developments further south, the Frank Gehry designed building will include rentals, some affordable housing and luxury condos on the higher floors. To retain the theatrical nature of 42nd Street, it will also include an off Broadway theater space as well as a hotel.
Bottom line, because of the recession and a more challenging financing environment the drop off in new construction will result in a possible shortage of new inventroy in 2012, thus putting some upward pressure on the condo market, shoudl all things remain equal or be improved during 2011.
2 Responses
I guess now there will be decline in prices. The economic slowdown will take care of it!!!
It is hard to truly say where Manhattan prices will go despite the economic downturn. I know that sounds like ‘broker-speak’, however what I have seen increasingly happen in Manhattan is what has occured in London. There are more and more ‘micro-markets’. Certain locations and types of Manhattan properties remain highly in demand by high-net-worth individuals and globally located buyers, while others which are more impacted by the local economy or high levels of similar inventory appear to have a less stellar return. In my opinion the uncertainties in the market dynamics and global equity markets certainly will create an effect on the real estate market, however, areas like Brazil and China are still at this moment (Sept 2011) realizing growth in their economies with increasingly larger sections of their populations having larger pools of income than ever before. Some of that income finds it’s way back to Manhattan in the form of pied-a-terres and investment properties from the 1 Bedroom market up to the 3,000 SqFt Plus Plaza Hotel Apartments. In Manhattan check the neighborhood and similar property inventory -that will give a sense of what’s happening locally – as each section of town and price point is moving just a bit differently than others – which is very different than 2004-mid 2008.