MANHATTAN — As the city’s real estate market picks up after Labor Day, buyers and renters are gaining a bit of leverage as inventory expands.
On the sales side, brokers are working harder at convincing their sellers to have more reasonable expectations about pricing if they want to attract buyers. On the rental side there's been an uptick in concessions, like a free month’s rent or paid broker’s fee.
But which neighborhoods will be hottest, particularly for new projects?
Here are some to look out for:
1. Western Queens gets hipper.
New development in Astoria. (DNAinfo/Jeanmarie Evelly)
With the impending L train shut down in 2019 for 18 months of repair work, neighborhoods in Western Queens like Sunnyside, Woodside and Elmhurst are poised to pick up some hipster slack, many said. Astoria, which has already been gaining steam, will also continue to grow in popularity.
“West Queens is the Williamsburg of 2008,” said Robert Sedaghatpour, of STRATCO Property Group, an asset management firm. “Only a few buildings are starting to get upgraded to 2016 standards, and it’s only a matter of time before it becomes a hipster area.”
Sedaghatpour is not surprised, saying, “Queens has always been about 10 years behind Brooklyn. Long Island City took off in the last five years, while Metrotech [in Downtown Brooklyn] took off 15 years ago.”
2. Downtown Brooklyn get lots more rental inventory.
A unit at 7 DeKalb in Downtown Brooklyn. (Photo courtesy of 7 DeKalb)
There are a lot of rentals expected to hit the market in Downtown Brooklyn, Fort Greene and Clinton Hill — which is good news for consumers.
A barrage of units IS expected to open all around the same time — upwards of 2,500, according to Andrew Barrocas of MNS, who noted that landlords typically offer lots of concessions when they want to lease out entire buildings.
“In any new lease-up, when you’re trying to absorb 30 to 40 units in the same line, not having concessions would work against you,” he said, adding that offering concessions helps “work out the kinks” of new buildings that may not be 100 percent open when tenants move in.
There were a similar number of units that came on line about seven years ago in the area and were absorbed within the year — and that was before infrastructure improvements were made to the area along with an improved dining and culture scene, Barrocas noted.
With the spate of new development offering incentives in areas like Downtown Brooklyn, many would-be renters aren’t even looking in Manhattan at all, said Douglas Wagner, of BOND New York.
“[Renters] are perfectly happy to strike great deals in brand-new properties,” he said. “There is unprecedented hand wringing among longtime Manhattan landlords, especially those with smaller portfolios of unrenovated rentals.”
3. Gowanus also becomes more of an “it” spot.
A view of the Gowanus Canal with new development in the background. (DNAinfo/Amy Zimmer)
It may seem strange for a Superfund site to become so popular, but it’s happening, Wagner said, “partly due to the addition of new rental inventory.”
There, too, incentives are being used to lure new tenants. At one Gowanus rental, for instance, the building was offering to pay brokers' fees, plus throw in a $500 American Express card for them and give renters a month’s paid rent, he noted.
For some new buildings, a developer might be “giving away” 25 percent of the first year’s rent, but that’s what they’re doing to show banks that rents on the books remain high.
“That’s how a neighborhood happens,” Wagner said.
4. Upper Manhattan becomes more desirable for renters.
A prefab building rising at 655 W. 187th St. (Photo courtesy of HAP Investment Developers)
Inwood and Washington Heights, with their lower prices that lure many renters looking to stay on the island of Manhattan, have become hot for new developments, too.
“It was always looked down up to travel 45 minutes to Northern Manhattan from Lower Manhattan,” Sedaghatpour said. “But now, a two-bedroom in Washington Heights is $2,400 a month and has the same high-end, condo[-level] finishes comparable to traditional rental hubs like Murray Hill.”
And Manhattan Valley is also seeing an uptick in interest — and pricing.
The area, which has many rental renovations and re-developments of older properties, is seeing renewed interest.
“This natural extension of the Upper West Side is now commanding prime rent numbers with the creation of mint new housing stock,” said Wagner, whose firm will represent one of the re-developed properties on Columbus Avenue in the 100s this fall.
5. West Chelsea is where ultra-luxury is pushing new boundaries.
The Jardim. (Photo courtesy of Douglas Elliman)
West Chelsea — the area west of 10th Avenue, just south of Hudson Yards and north of 16th Street — has become “the hottest downtown neighborhood,” especially for the high-end set as the Terminal Stores Building is expected to bring a Chelsea Market-type scene to 11th Avenue and West 28th Street, said Serjik Markarian, of FirstService Realty NYC.
Some of the most noteworthy buildings include the Jardim, at 527 W. 27 St., which is building a private tunnel for a driveway underneath the building that connects 27th to 28th streets and will allow residents to get in and out of their cars in privacy.
“It took them more than a year to get the permits for it,” Markarian said. “This is a porte-cochère of a modern world. This is the most unique amenity I have seen in any luxury new construction.”
6. The Financial District and Seaport are hopping.
One Seaport. (Photo courtesy of Douglas Elliman)
This corner of Lower Manhattan has seen a rash of development over the last several years, a lot of which is finally opening in the coming months.
“We’ve been living in a construction zone for the past 8 years,” said Sienam Lulla, a broker with Compass, who moved to the Financial District nearly a decade ago. But now that many of the projects are finished — Brookfield Place’s high-end shops and food markets, Eataly NYC Downtown, The Beekman (a hotel with eateries from Tom Collichio and Keith McNally) and the Four Seasons hotel and residence — they’re already attracting new buyers, she said.
“We used to get buyers who already lived in the neighborhood and liked it. Others would say, ‘It doesn’t feel residential. This is the year that it’s changing,” Lulla believes. “I’m now getting buyers from the Upper East Side. And they’re asking questions about schools, which is something never asked before.”
The area has a lot of inventory in the $1 million to $3 million range, which is especially doing well, she added.
Nadia Meratla, of Douglas Elliman Development Marketing, also said the area is doing well, especially for foreign buyers looking for apartments in that “target” $1 to $3 million price range.
At 1 Seaport, the building has attracted “considerable” attention from foreign buyers, especially from Singapore and Taiwan, she noted.
“It has a strong international appeal with smaller residences under $3 million,” she said.
