The Real Deal

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Seaport neighborhood quietly attracts attention

The 20-unit 257 Water Street is likely to be converted into a condominium.

The narrow blocks surrounding the South Street Seaport are dominated by cobblestone streets and 19th-century brick buildings constructed when the area was a hub of maritime trade.

The city's recent condo boom bypassed the micro-neighborhood -- which is bounded by the Brooklyn Bridge to the north, Fletcher Street to the south, Pearl and Water streets to the west, and the East River. Plans to develop condos in recent years have amounted to little, and development has been dominated by conversions of commercial buildings into rentals.

Nevertheless, brokers who work in the area say it has growing cachet, and that some of their clients are seeking out Seaport-area apartments as an alternative to living in the West Village. They also say many renters they work with are eager to buy, indicating a built-in market for condo inventory.

"People picture us as the Meatpacking District without the nightclubs and the West Village without the celebrities," said David Goldoff, an owner of Camelot Realty, which manages the rental building at 257 Water Street. Goldoff's family used to own the building but sold it in early 2008 for $16.5 million, according to a report from Eastern Consolidated, which brokered the deal.

Goldoff has lived in 257 Water Street for a decade, and he said rents in the building -- which was renovated after its sale -- start at $2,300 for studios, $3,200 for one-bedrooms and $4,300 for two-bedrooms.

He and his associates said the 20-unit building will eventually be converted into a condo with around a dozen large units.

The area's zoning and landmark status mean as-of-right building is generally limited to low-rise construction. The only recently built structures are part of a project called Historic Front Street, which was finished a few years ago and involved the restoration of 11 buildings and the construction of three new ones on Front Street between Beekman Street and Peck Slip. The development created 95 new rental apartments as well as several new commercial spaces.

Those new rentals were quickly snapped up, according to area brokers.

"A lot of my renters never want to leave," said Cynthia White, an agent with Royalton Realty who specializes in Seaport-area rentals and has lived in the area for 15 years.

"There's very low turnover, and there isn't enough inventory to satisfy the demand to live here."

Meanwhile, developer Milstein Properties' long-held plans to build high-rises on a parking lot at Water Street and Peck Slip were dealt a deathblow by a 2003 downzoning, though sources say the Milsteins are still actively pursuing rights to the project via litigation.

Another flashy project dead near the water is the Santiago Calatrava-designed glass-cube tower that was slated to rise at 80 South Street. The project's developer, who reportedly wanted to sell each of its residences for around $35 million, canceled 80 South Street last year.

Still, while the lack of new construction near the Seaport is a stark contrast to the dozens of new condos developed in the Financial District in recent years, brokers say the Seaport's conversions have brought in some fresh blood.

Ariel Cohen, an executive vice president at Prudential Douglas Elliman active in the Financial District, called the Seaport "the last place in Manhattan to be developed" and said it generally isn't on the radar of his Financial District clients.

"It's not even on the map for most people, but I think buying a small building there and converting it into condos would be a great investment," he said.

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