The Real Deal New York

LES prices push past $2,000 a foot

New condo projects boost neighborhood's sales market

May 04, 2015 03:30PM
By Rich Bockmann

From left: 100 Norfolk Street (credit ODA New York), Aril Tirosh (top), Fredrik Eklund and 50 Clinton Street (credit PAPERFARMER)

From left: 100 Norfolk Street (credit ODA New York), Aril Tirosh (top), Fredrik Eklund and 50 Clinton Street (credit PAPERFARMER)

The Lower East Side, one of the city’s most storied neighborhoods, has long been an overlooked corner of the Manhattan residential sales market. But it finally seems to be coming into its own as the new-development pipeline pushes unit prices past the $2,000 per-square-foot barrier.

The Lower East Side saw just two new development units sold in the first quarter of the year, accounting for less than one percent of all sponsor units sold across Manhattan, according to a recent report from residential brokerage MNS. But the pipeline is growing.

“I think for a long time the demand wasn’t there for this type of product,” MNS CEO Andrew Barrocas said. “I think that based on some of the new product for the area, we’re seeing some positive reaction. We’re seeing numbers on par with other parts of the Downtown market, where [units in new] buildings are getting over $2,000 per square foot and some up to $2,500 per square foot.”

Brokers with new Lower East Side projects on the market told The Real Deal that units in their buildings are averaging blended prices north of $2,000 per square foot.

One of those buildings is Adam America Real Estate’s 38-unit 100 Norfolk, which is designed by Eran Chen’s ODA New York, and sits at the corner of Delancey Street. A 2008 rezoning paved the way for bigger projects in the area.

“We’re seeing larger-scale projects happening,” said Douglas Elliman broker Ariel Tirosh, who is leading sales at 100 Norfolk.

In-contract units there are blending at $2,171 per square foot, Tirosh said.

Another building pushing past the barrier is DHA Capital’s 37-unit 50 Clinton Street, where the in-contract units are blending at $2,100, said Elliman’s Fredrik Eklund, who is directing sales at the building.

“Two-and-a-half years back when we programmed the building. . . we thought there would be a lack of buildings with efficient units: $1 million one-bedrooms, $2 million two-bedrooms [and] $3 million penthouses,” he said. “We’re setting a high price per square foot, especially with the penthouses.”

Eklund last week launched sales at 204 Forsyth Street, located between Houston and Stanton Streets, where the three units on the market are asking a blended average of $2,386 per square foot.