The future of Manhattan’s condo market is Downtown.
Out of a total of 4,580 condos projected to hit the Manhattan market by 2016, nearly 30 percent will be located below 14th Street, according to a new report from the Marketing Directors.
At a breakfast briefing held at the W Downtown, the Marketing Directors said that in 2015, Downtown will see 22 new condo buildings with a total of 526 units. Two of the largest developments hitting the market this year are conversions, rather than ground-up construction, including Ben Shaoul’s 161-unit development at 100 Barclay, and the Chetrit Groups’s 49 Chambers Street, which will have 81 condos.
In 2016, the Marketing Directors projected 17 new condo buildings Downtown with a total of 823 units. In a twist, the location of the buildings will shift to the Lower East Side and East Village from Tribeca and the Financial District.
The Marketing Directors also said the scarcity and cost of land is impacting condo values. In prime Manhattan, standard land costs are roughly $900 to $1,000 per buildable square foot. That cost drops to between $500 and $800 per buildable square foot in second-tier areas, and $200 to $400 per buildable square foot in tertiary areas.
Andry Gerringer, the Marketing Directors’ managing director, said developers’ margins are being squeezed and as a result, many are “pushing the envelope” when it comes to sellout values. With developers hungry for buildable land, Gerringer predicted more condo development in East Harlem and Washington Heights.
Beyond Downtown, the Marketing Directors said Midtown East is projected to see 975 new homes, followed by the Upper East Side with 797, the Upper West Side with 745 and Midtown West with 700.
Adrienne Albert, founder of the Marketing Directors, noted there is “some slowing in the extremely high priced” condo market.
“Prices aren’t down, but absorption has slowed,” she said.