The median price for a Manhattan apartment just hit $1.15 million for the first time, and a big drop in projects added to the city pipeline won’t do anything to bring that number down.
During 2015, some 28,836 new residential units were proposed for construction or conversion in projects of at least 15,000 square feet, according to a TRD analysis of permit applications from the Department of Buildings for all of New York City. But that number is significantly lower than the more than 43,000 such units that TRD could count for 2014, meaning a 33 percent plunge in planned apartments across the five boroughs will also mark what the New York Times called “The Year of the Condo.”
Source: TRD analysis of DOB permit applications of at least 15,000 square feet.
The most active month for residential filings in 2015 was March, when 3,674 qualifying units were submitted. Compare that to September of 2014, a jam-packed month that saw over 9,000 proposed units, a figure bolstered by Two Trees’ Domino Sugar building at 325 Kent Avenue in Williamsburg (522 units), Red Apple Group’s 86 Fleet Place in Downtown Brooklyn (440 units), and Clipper Equities’ and Chetrit Group’s 77, 85 and 87 Commercial Street in Greenpoint (720 units).
Developers applied to build far fewer of these megaprojects in 2015, and as such, the average monthly unit count was about 2,400, with the lightest month being April, when the unit count dipped below 1,000. As TRD previously reported, the number of residential buildings came down in 2015 as well, with developers planning significantly fewer buildings over 200 feet tall or with more than 200 units.
“I think the price of land increased so much over the last year that developers are pushing back because they cannot make sense of the numbers or get construction financing,” said Robin Schneiderman, director of business development at Halstead Property Development Marketing. “This is a healthy sign for the market as sellers need to come back down to reality,” he said.
Steve Kliegerman, president of HPDM, said 2015’s sliding numbers “are not all that surprising.” He echoed the sentiment on the high price of development sites while adding that he was seeing renewed activity in that market––though the problem remains that there are very few such sites left.
“I do not think we will see the same level of permit applications we did in 2014 simply due to the available supply of large sites and the demand that was created due to the lack of construction from 2009 to 2013,” he said.
Related: See the top 10 permits filed in Manhattan during 2015
In hotel filings, the year-over-year unit drop was even more significant. For 2014, TRD counted 11,630 proposed units in known hotel projects of at least 15,000 square feet. In 2015, that number fell to 5,237. The dearth of hotel units added to the pipeline will not surprise anyone who has been following the New York hotel industry–in spring of last year, hotel research firm STR predicted that supply would peak in 2015 and then begin dropping in 2016 and beyond. With far fewer units sent to the Department of Buildings during 2015 than in the year prior, a decline in hotel pipeline and eventual supply now seems inevitable.
Queens accounted for close to half of all hotel units applied for all of New York City during 2015. Qualifying Manhattan hotel units tumbled the most, from over 7,000 in 2014 down to around 2,000 the next year.
Despite the drop from the year prior, December was a strong month for hotel applications, with 954 proposed hotel units and 426,000 square feet sent to the DOB from the Bronx, Brooklyn and Queens. The largest hotel filing came from Chartwell Hospitality in Jamaica, Queens where Gene Kaufman Architects will design two 11-story towers containing a total of 362 rooms.
Source: TRD analysis of DOB permit applications of at least 15,000 square feet
In residential filings, builder aspirations were capped at 300,000 square feet, with the largest application also coming from Jamaica, Queens, where Artimus Constuction plans to build a 26-story tower with 380 apartments. The most active borough for residential plans in December was Brooklyn, where 18 filings totaled 707 units and more than 600,000 square feet. Queens contributed the second most apartments, 618, and 530,000 square feet. Manhattan resi plans were mostly small, but the Salvation Army came in with a late Christmas present on Dec. 30 when it filed to build an 11-story affordable housing tower for seniors at 2306 Third Avenue, with 232 units. Only one Bronx project — two affordable buildings in Longwood — was large enough to make our count and, as usual, nothing filed in Staten Island measured more than 10,000 square feet.
As for commercial filings, Ziel Feldman’s HFZ Capital Group is planning a 243,000-square-foot office and retail building at 76 11th Avenue in Chelsea, where it will also submit plans for 300 condo units in a separate tower. Woods Bagot is listed as the filing architect, although previous reporting had indicated that Bjarke Ingels was designing. In Brooklyn, Steiner Studios will add another building to its ever-growing collection of studio spaces with a 179,00-square-foot structure for six soundstages. And in the Bronx, a 100,000-square-foot warehouse will replace vacant lots and an auto-shop at 2325 Hollers Avenue in Eastchester.