The Real Deal New York

New condos on Gramercy Park

October 29, 2007
By Lauren Elkies

In a deal that is attracting as much attention as a ringing bell at Christmas, the Salvation Army has put Parkside, its Gramercy Park women’s residence, up for sale for more than $100 million.

The 83,000-square-foot property, which has unobstructed views of Gramercy Park, has received a lot of interest and is expected to become a luxury condominium (see below).

The parcel, known as the Parkside Evangeline Residence for Young Women at 18 Gramercy Park South, is one of the last developable properties on the park, and is eagerly sought after because the posh neighborhood has little available inventory. (There is a single large rental building on the park, located at 36 Gramercy Park, which is rumored to soon be becoming a co-op or a condo).

“Everything else is a co-op or condominium or private residence on the park, or commercial,” said Josh Frank, vice president at Halstead Property, who lives in a building facing the park.

An enclave Downtown

Gramercy Park itself is the central point of the Gramercy area, which loosely spans from 18th to 22nd streets from Second Avenue to Park Avenue South. Buildings along the sides of the park, except for the north side, fall within the Gramercy Park Historic District, and are therefore bound by city regulations.

Only residents immediately around the park are granted access to the city’s lone private park.

The park is surrounded by tree-lined blocks, row houses, mansions and apartment buildings, including the oldest surviving co-operative in New York City. Its cultural centers include the National Arts Club, the Players club and Brotherhood Synagogue.

Adding Schrager luxury

There’s also Ian Schrager’s newly transformed Gramercy Park Hotel and soon-to-be opened adjoining condos, which total 30 units.

The hotel has garnered a lot of praise from area brokers who eagerly await the completion of the Schrager condominiums there.

The hotel had its opening party over the summer and the apartments are reportedly almost all snapped up, fetching prices of upward of $3 million. (A spokeswoman for the project declined to provide an exact figure on how many units have sold.)

When units immediately around the park come up for sale, they are fetching high prices.

Cyrus Greenspon, a senior vice president at Sotheby’s International Realty, was closing a deal last month for a classic-six apartment in a pre-war, full-service building at 60 Gramercy Park North, between Lexington Avenue and Park Avenue South. It had an asking price of $2.1 million.

All the more reason for developers and brokers to salivate over the Parkside Evangeline, which, as its name implies, is just steps away from the park.

The neighborhood’s edge

Apartments selling beyond the periphery of the park are not always commanding such high prices.

Steven Marvisch, an associate broker at Brown Harris Stevens, was in contract last month for an apartment at 102 East 22nd Street, between Lexington Avenue and Park Avenue South. At less than 600 square feet, the one-bedroom apartment had a reduced asking price of $499,000, and had been on the market for eight weeks.

Regardless of the price today, the apartments have all seen sizable appreciation from years ago.

“Any buyer who bought something seven years ago is probably doing very nicely on their investment,” Marvisch said.

He knows a person who purchased a one-bedroom apartment in the same building as his customer about 10 years ago. “It’s probably more than quadrupled in value,” Marvisch noted.

In some other recent deals that show the state of the market in the neighborhood, Nancy Van Bourgondien, a Corcoran Group sales agent who has lived in Gramercy for 28 years, separately sold two side-by-side one-bedrooms, at 211 East 18th Street, both with outdoor space, for $565,000 and $555,000 over the summer.

Last month, Van Bourgondien was in contract for $1.135 million for a two-bedroom, two-bath apartment in a prewar building on East 19th Street.

Residence a prime development opportunity

The Parkside Evangeline Residence for Young Women at 18 Gramercy Park South, run by the Salvation Army, provides women with inexpensive temporary boarding plus two meals a day, though some women have made it more of a permanent home.

It’s likely to house more affluent residents in the near future, as the building is now on the sales block and could be transformed into condos.

Many of the current residents have already moved out and Parkside has stopped accepting new applications in preparation for the imminent sale. Though the Salvation Army has not gone public about the sale, the residents were notified of the sale several months ago.

“It’s not listed anywhere,” said Maya Allan, a Parkside resident and sales agent at Prudential Douglas Elliman. “They are contacting a lot of developers directly. It’s a hot place. It’s a prime location. They don’t need to do too much.”

Allan said the news was not a surprise because rumors of a sale had been circulating for years. In addition, the Salvation Army has been selling off a lot of its properties. “It was just a question of time,” Allan said.

The building, which has a capacity for around 300 residents, has garnered interest from both foreign and local developers and investors, including Gramercy Park residents.

The Salvation Army has reached out to potential buyers by sending them brochures and in turn has been receiving sealed bids of interest. GVA Williams is the sales agent for the property.

Arlene Harrison, president of Gramercy Park Block Association and one of five trustees of Gramercy Park, said she did not think the Salvation Army, as a nonprofit charity, could justify keeping a residence like Parkside, which resembles a college dormitory and where woman pay under $300 a week, when it can sell the building for such a high price. If the building fetches $100 million, that would amount to $1,200 a square foot.

Major Carol Bryant, the administrator of the Parkside residence, said the building was being shown privately to potential buyers.

“Whatever is done there will be luxury of some kind,” said Josh Frank, a vice president at Halstead Property, who said the building is ripe for development.

Kenneth Scheff, director of sales for the Downtown offices of Stribling & Associates, said Parkside was one of the most exciting projects he has heard of recently.

“That would be an unbelievable condo development; it would be tremendously well-received,” Scheff said.

Since Parkside falls within the Gramercy Park Historic District, and is therefore bound by city regulations, the main concern for some area residents is that the new developers make the building “appropriate.”

“The key word that everybody will be concerned about is ‘appropriate’ to the historic district,” said Rector Thomas Pike of Calvary Church, a New York City Landmarks Preservation commissioner and trustee of Gramercy Park. “There’s an openness to change, but not to radical change.”

He said that the best use for the building would be “for it to remain residential and certainly that would remain consistent with the historic district.” But, he added, “If it were up to me, I wouldn’t change it.”

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