C. J. Hughes | September 26, 2014
owntown may be enjoying more buzz. But the Upper West Side, that not-too-edgy, not-too-bland land of large parks and elegant prewar facades, is holding up its end of the conversation.
Lines snake out the door during open houses in the neighborhood, which by many definitions runs from Columbus Circle to Columbia University between Central and Riverside Parks. Verdi Square, by the West 72nd Street subway stop, has become as much a place to hang out as pass through, round the clock. And many residents insist they wouldn’t consider living anywhere else.
Naturally, then, prices remain among the highest in the city, though that may only partly have to do with strong demand.
For the past few years, the Upper West Side has suffered from a severe shortage of inventory, according to housing data, even as other Manhattan neighborhoods have been adding apartments.
But after a couple of years when few, if any, new apartments were introduced, a miniboom appears to be taking place on the Upper West Side, with a half-dozen significant developments either underway or close to it, in the heart of the neighborhood: the West 70s and 80s.
Because most of those condos are conversions of existing rentals, analysts say the overall amount of housing is not going to change and may, if anything, decrease. But bad news for prospective renters may be great news for prospective buyers.
“We hear it from our brokers all the time. ‘When are we getting some relief? When are we getting inventory?’ ” said Gregory Heym, the chief economist for Terra Holdings, which owns Halstead Property and Brown Harris Stevens. “There’s nothing to sell.”
Of course, in a city roiled by skyrocketing housing costs, removing rentals is bound to cause a stir. Critics say it is especially a problem if conversions result in the loss of rent-regulated units. These make up 40 percent of the Upper West Side’s rental stock, more than in many other parts of Manhattan.
But successive waves of gentrification have already cut into affordability. Rising rents on the commercial side, for instance, have pushed out standbys like the Popover Café, even as restaurants from hipper enclaves downtown arrive to fill the vacuum.
Still, locals say, the Upper West Side is a singular spot.
“It just feels really down-to-earth to me here,” said Randi Barrett, a fashion executive, who met her husband over sangria at Citrus Bar and Grill on Amsterdam Avenue and has lived in the area for most of her 23 years in the city.
But it hasn’t always been easy. For the past seven years, Ms. Barrett and her husband have had to rent because the places they wanted to buy kept slipping through their fingers.
A few months ago, they finally closed on a four-bedroom co-op on West End Avenue with all the prewar touches they coveted, such as thick walls and a private vestibule. “I’m a West Sider for life,” Ms. Barrett said.
If buyers like Ms. Barrett have their hearts set on apartment houses built before World War II, they would seem to have much to like on the Upper West Side, which is protected in places by historic districts. Prewar sales made up 60 percent of all transactions in the area this past spring, according to Miller Samuel, the appraisal firm. In contrast, prewars made up just 39 percent of all deals on the Upper East Side.
“I think more than anything, people are looking for good square footage, which primarily is seen in older buildings, even if new construction is starting to address the needs of large space users,” said John Burger, a broker with Brown Harris Stevens. Mr. Burger had eight Upper West Side listings earlier this month, most in prewar apartment houses like the San Remo, the Beresford and the Century.
While shiny new residential towers have risen elsewhere in Manhattan in recent years, they have been rare on the Upper West Side. According to a 2013 housing report from the Furman Center for Real Estate and Urban Policy at New York University, in 2010 the city did not issue a single residential certificate of occupancy — required for new housing construction, whether rentals or sales — on the Upper West Side.
In Hell’s Kitchen and Chelsea, by contrast, 77 units were certified, while 380 units were certified on the Upper East Side.
In 2011, there was a sudden jump on the Upper West Side, to 113 units. But the following year, even as the housing market was heating up, no certificates were issued on the Upper West Side, according to the report. Last year, 101 units were certified.
The latest crop of new developments is made up primarily of conversions of midsize rental buildings from the turn of the last century, like the 14-story Chatsworth, at 344 West 72nd, a project of the HFZ Capital Group.
Decorated with garlands, deer heads and cherubs, and with a chandelier-hung marble lobby, the building contains 159 apartments, though that total will shrink to fewer than 100 as units are combined to make them roomier, said Ziel Feldman, HFZ’s founder and managing partner.
“Generally, the demand is for bigger and better,” Mr. Feldman said. But how exactly the apartments will be finished is still being hammered out.
A quarter of the building’s tenants are rent-regulated, so some units won’t turn over immediately, he said.
The attorney general signed off on the plans for the Chatsworth this summer, and all city permits and approvals are in place, Mr. Feldman said. Sales will start by year’s end, at around $2,500 a square foot.
Similarly, HFZ is converting a 1905 rental at 235 West 75th Street known as the Astor Apartments, a full-block complex along Broadway with a moss-green cornice and 199 units. But because the project awaits state approval, Mr. Feldman could not provide details.
A richly textured facade also graces the Orleans, a 26-unit conversion at 100 West 80th Street, at Columbus Avenue, whose offering plan was approved last month.
The developers are David Sterling and Nora Lavori, who are business partners as well as residents of the building, a 1910 white-frosted red brick confection. Though they have been renovated over the years, the apartments are being sold as-is as renters move out. The turnover is expected to be relatively smooth; all of the tenants live in market-rate units, which can be taken back when leases expire.
The first batch of homes there — a total of five — are being listed this fall, with two out of the gate so far, said Jill Sloane, the Halstead agent in charge of sales. The least expensive apartment of the five is a four-bedroom, three-bath, listed for $4.6 million.
“My thought is that every buyer wants to do something different,” said Ms. Sloane, explaining the decision to skip a gut renovation.
Besides, she said, at prices averaging $2,150 a square foot — below those of some rivals — buyers “will have extra money to renovate.”
If buyers like historic exteriors, they prefer the insides of their apartments to have a contemporary luster, said Louise Phillips Forbes, the Halstead agent handling marketing at 498 West End Avenue, a cream brick former rental at West 84th Street that is to launch sales in October.
Very few prewar flourishes, such as crown molding or glass doorknobs, will be retained. But each apartment will gain washers and dryers, marble-slab kitchen counters and leather-faced bathroom drawers.
The developer, Samson Management, purchased the building in 2012 for $53 million, and Ms. Phillips Forbes said that heavy wear and tear by tenants over the decades had left it in ragged shape.
Like other conversions, No. 498 is combining some units to cater to the families that flock to the Upper West Side; 48 units will become 37. The outside is getting spiffed up, too. Samson will power-wash the facade, which was streaked with dirt on a recent afternoon, and replace the missing cornice.
“She may not be so beautiful today, but she will be beautiful when we’re done,” Ms. Phillips Forbes said. The offering plan has been approved, and the condo is to open in 2015.
Prices range from $1,800 a square foot for the lower-floor units to $2,500 a square foot for those on the upper stories, excluding the penthouses, or an average of $2,100 a square foot.
Margaret Streicker Porres, the president of Newcastle Realty Services, a developer, said that prewar buildings offer tantalizing chances to integrate antique and contemporary looks. She cited a current Newcastle project, 101 West 78th Street, a coppery-red rental adorned with griffins across from the American Museum of Natural History.
Known as the Evelyn, though it is losing that name, the U-shaped 1886 building will have a covered fitness center in its courtyard; a penthouse with four exposures will be installed on the roof.
The building will have interiors designed by Stephen Sills Associates. The unit count will fall to 24 from 44, and those apartments will have between one and five bedrooms. But No. 101 awaits offering-plan approval; it also has about a dozen rent-regulated tenants.
Whether tenants there and elsewhere will ultimately purchase their apartments, stick it out as renters or decamp remains to be seen. But in any case, the flurry of conversions is potentially troubling, as it will likely lead to the elimination of lower-cost places to live, said Benjamin Dulchin, the executive director of the Association for Neighborhood and Housing Development, an advocacy group.
“Developers see this as untapped potential,” he said, “but unfortunately, that untapped potential is a nice long-term affordable apartment, and the neighborhood is better for having them there.”
Mr. Dulchin added that unlike, say, the Upper East Side, the Upper West Side has traditionally prided itself on its range of income levels. “What made it great was that it was a wonderful mix of people,” he said.
Not every rental will be converted. Thor Equities, a commercial landlord that last year launched Thor Residential to invest in apartments, recently snapped up five rental properties in the area for its first five deals. They are a pair of connected rentals at 120 and 125 Riverside Drive at West 84th, which have 95 units; 150 West 82nd, near Amsterdam, 58 units; 840 West End Avenue, slightly outside the core district at West 101st, 40 units; and across the street, 838 West End, 69 units.
All will remain rentals, according to Alan M. Klein, a Thor Residential principal. But common areas and those apartments that are not rent-regulated — between half and two-thirds of the buildings — will undergo extensive renovations, including removing extraneous walls, Mr. Klein said. Fewer apartments, and roomier ones, will be a result.
“We’re bringing these apartments back to the way they were originally architecturally configured,” he said, adding, “the Upper West Side is starving for this kind of product.”
And at No. 120 and No. 125, the first to be renovated, Mr. Klein said, rents are expected to be about $10,000 a month for 1,500-square-foot three-bedrooms.
In August, the median rent in the area was $3,229 a month, according to Miller Samuel. Even with the recent condos, new development on the Upper West Side lags behind that in other parts of Manhattan. New-development sales, which include from-scratch construction as well as conversions, made up 16 percent of total transactions on the Upper West Side in 2010, according to Mr. Heym of Halstead, while in Lower Manhattan, or south of 34th Street, new and converted condo sales accounted for 30 percent.
That gap persists. In 2013, new development sales were 10 percent of the sales market on the Upper West Side, compared with 18 percent downtown.
A lack of development sites in the neighborhood, much of which is covered by two historic districts, the West End-Collegiate and the Upper West Side-Central Park West, may explain some of that shortage.
One of the Upper West Side’s new residential buildings did grab a site, replacing a parking garage at 210 West 77th Street, between Broadway and Amsterdam Avenue. No. 210 West 77th, a 25-unit condo from the Naftali Group, a three-year-old development firm, will sport chocolate-colored brick, mahogany French doors and white lacquer kitchen cabinets. Demolition of the garage is now complete and foundations are about to be poured, said Miki Naftali, the firm’s chief executive. The smallest unit will have three bedrooms; some apartments will have fireplaces.
Sales opened this month, with prices averaging $2,800 a square foot, and starting at $4.8 million. But Mr. Naftali said it would be premature to discuss sales progress.
However new and gleaming the building, Mr. Naftali says his project, designed by Thomas Juul-Hansen, will be a restrained entry in an area that takes its beamed ceilings seriously. “It’s a little more contemporary, but far away from a glass box,” said Mr. Naftali, who is under contract to buy another parking garage across the street, where he also plans to build from scratch.
Meanwhile, demand remains intense. In August, the Upper West Side’s absorption rate — how long it takes for every available apartment to be sold — was 3.1 months, versus 3.8 months downtown, according to Mr. Heym. On the Upper East Side, that number was 4.3 months.
Over all, in the second quarter, according to Miller Samuel, the average sales price across the entire Upper West Side was $1,300 per square foot. The Manhattan average was $1,268 per square foot. The median Upper West Side sales price, meanwhile, was $999,000 in the second quarter, versus $910,000 for all of Manhattan.
While the prices of recent condo conversions may seem steep, they are following the lead of the Laureate, a 20-story, 71-unit condo at 2150 Broadway, across from the Astor Apartments. Priced at a game-changing $2,000 a square foot when it hit the market in 2011, the ground-up luxury building, from the Stahl Organization, sold out in a year. An apartment recently traded there for $2,700 a square foot, according to StreetEasy.com.
In a city always chasing the next hot trend, the constancy of the Upper West Side is often cited as a draw. For years, the area has boasted good schools, both public and private; 19 percent of all Upper West Side households have children younger than 18, according to the Furman Center.
And those leafy parks, despite being occasionally too busy to allow for a quiet sit, are within a short walk of most homes. Central Park has about 840 acres, while Riverside Park has 323.
Restaurants like Cafe Luxembourg on West 70th Street, and Isabella’s, by the natural history museum, date back to the 1980s, which is notable in the city’s high-turnover, short-life-span restaurant scene.
But the uptown-downtown divide has been breached in recent months by several Lower Manhattan favorites, like RedFarm, an inventive Chinese restaurant that expanded from the West Village to Broadway, and the Meatball Shop, which opened on the Lower East Side in 2010 and now has an outpost on Amsterdam.
“There is a renewed energy about the Upper West Side,” said Ms. Porres, the Newcastle Realty president. “There is a generally a lot more attention being paid.”