The East Village has a rich and diverse history filled with influences from numerous cultures and heritages. Long known for its vibrant art, music, and food scenes as well as younger and liberal-leaning residents, the neighborhood has traditionally been characterized by a relatively affordable housing stock replete with numerous rent stabilized apartments.
In the past decade or so, however, primarily since the development of the A Building on 13th St. in 2008, the neighborhood has experienced a sea change in the makeup of its real estate, both residential and commercial, as well as in its overall vibe.
The 19th- and 20th-century buildings have made way for new developments as a wave of gentrification has swept across the neighborhood, leaving luxury apartments and upscale retail in its wake.
While in the past there was a lack of development in the neighborhood, particularly in Alphabet City, in recent years many developers have aggressively pursued rent stabilized tenant buyouts, upgrading existing tenement buildings to luxury rentals, and many have taken advantage of land and ground up building opportunities wherever available to create luxury new condominium projects.
I recently sat down with David Amirian, founder of the Amirian Group and an active developer in the neighborhood, to discuss, from the perspectives of developer and broker, what the East Village was, what it is today, and where we see it going.
David and I both agreed that the East Village has been a bohemian bastion of (relative) affordability in downtown Manhattan, substantially more accessible than its western cousins in Greenwich and West Village, for many years.
Its grittiness and down to earth vibe, with tiny storefronts and edgy cultural scene, has appealed to many NYU students and recent college grads, giving the neighborhood a constant flow of young new residents. This all remained largely unchanged until a decade or so ago.
The A Building, a ground-up doorman condominium on East 13th St. between First Ave. and Ave. A, was the real turning point for the neighborhood according to David and I agree with his assessment.
The first building of its kind for the area, with doorman, gym, and rooftop swimming pool, the project brought new pricing levels to the East Village and a new clientele. At the time, between 2006 and 2007, the A building sold out at around $1,200 per square foot.
Fast forward 10 years later and the average blended price per square for all the new developments currently on the market in the neighborhood is around $2,000.
"That's approximately 67% appreciation in 10 years" as David points out. It's an extraordinary rate of growth when you consider that this 10-year period included the Great Recession and a 2 to 3 year period of declining prices and stagnation.”
The $2,000 per square foot barrier was first broken with 100 Ave. A, a ground-up doorman condominium on Ave. A between E. 6th and E. 7th Sts., that is virtually sold out at prices averaging over $2,200 per square foot.
Douglas Steiner's condominium project, a large through-block site at E. 12th St. and Ave. A, offers unusual scale and proportions for the neighborhood with a 10,000 square foot retail space and residential units selling at an average of over $2200 per square foot as well.
Amirian is developing Thirteen East + West, on 13th St. between First Ave. and Ave. A, where prices average approximately $1,800 per square foot.
Projects like these were literally unheard of before a year or two ago in the neighborhood. While many local residents and owners are shocked to see these types of prices for the East Village, for many buyers these sales represent a meaningful discount from Chelsea, the West Village, and other neighborhoods downtown where brand new doorman condos regularly sell for at and above $3,000 per square foot.
Real estate development has not only yielded new pricing horizons, it has also pushed the geographical boundaries previously deemed attractive for luxury development.
New buildings are sprouting up further east into Alphabet City all the way to Ave. D with the recently constructed luxury rental building, The Adele, 67 Ave. C, a newly constructed boutique condominium building, as well as 324 E. 4th St., Altes House, a new boutique condominium where my team handled sales last year.
In addition to the shift in the makeup of the residential real estate market, one of the biggest changes in and around the neighborhood has happened on the retail front.
With Trader Joes on the horizon, Target scheduled to open in 2018, and a Tompkins Square Park renovation in the works, Amirian believes more and more improved retail will continue to open up in the area.
Currently a hot spot for NYU students, the food and bar scene is thriving, with New Jersey bakery Patisserie Florentine, Make Sandwich shop from the creators of Melt Shop and popular bar VNYL opening late last year.
Well-known Staten Island pizzeria Joe and Pat's is opening up shop at 168 First Ave. within the next six months, its first Manhattan location.
With all this in mind, what does the future hold for the area? "There will be less and less rent-stabilized tenants as they are bought out or age out," Amirian explains. He believes, and I agree, that the dominant price range for condos in the neighborhood will continue to remain between $1M and $4M as buyers above $4M will often consider SoHo, Chelsea, TriBeCa, and central and West Village properties instead even with the recent changes in the area.
As to pricing, "I would imagine it may near $2,500, and then will stabilize around that level for a few years."
Ari Harkov is a real estate broker with Halstead Property and heads up the Harkov Lewis Team, along with his business partner Warner Lewis, one of the top teams in the nation as ranked by the Wall Street Journal. The team, which focuses on residential sales in Manhattan and Brooklyn, works with both individual buyers and sellers and developers. Ari holds an MBA with honors from Columbia University and currently resides in Park Slope, Brooklyn, with his wife, two sons, and dog.
Thursday, February 16, 2017