For years, the promise of a Second Avenue subway line has tantalized residential developers who have been hungrily eying the stretch of the Upper East Side between Third Avenue and the East River.
With the first phase of the new line — which will run between 63rd and 96th streets — set to open in late 2016, a wave of new condos are being constructed in the hopes of luring new residents to this often overlooked submarket.
In all, there are close to 900 condo units being developed across 19 projects on the Upper East Side between 59th and 96th streets, according to Halstead Property Development Marketing. Of those, 12 are located east of Lexington Avenue in Yorkville.
Some of the developments are the result of large and complicated assemblages; others are large-scale conversions of the neighborhood’s ample rental stock.
“There’s going to be tremendous growth in this neighborhood over the next 10 years,” said developer Ben Shaoul, whose firm Magnum Real Estate is converting 389 East 89th Street into condos.
Barbara van Beuren, managing director of development firm Anbau, said that when her company was evaluating development sites two years ago, it saw a void in the Manhattan condo market for units priced under $3,000 per square foot.
That led them to Yorkville.
“Other people were overlooking” the neighborhood, said van Beuren, whose firm is developing a condo on East 89th Street. “Now it’s obviously a different story.”
Shaoul said the area’s high-density zoning is a big draw for developers. In addition, he noted that low retail rents — $300 to $400 per square foot in some locations — is driving development.
“Retail has been low because the area wasn’t developed,” he said, noting that the additional transportation is the spark developers needed.
On top of that, buyers have always been enticed by the throwback feel of Yorkville.
“This is a real Manhattan neighborhood that hasn’t been infiltrated by commercial tenants yet,” Shaoul said. “There’s still a grocer, a butcher. There’s a Starbucks, of course, but [the neighborhood] is still very mom-and-pop.”
Families, in particular, have long been drawn to the Upper East Side because of its high concentration of private schools like Dalton, Spence, and Chapin, as well as popular public schools such as P.S. 6, P.S. 290 and P.S. 158.
Nevertheless, some warn that the area’s construction boom may be too much, too soon.
Robin Schneiderman, director of new business development for HPDM, said multiple projects are hitting the market around the $2,500-per-square-foot price point at the same time.
While developments along Second Avenue or farther east can now justify high prices because of their proximity to the subway, he noted, “That’s a lot of luxury product.”
“Yes, it’s great to have exciting new development projects on the Upper East Side,” Schneiderman said. “The question is, how will the market respond to that?”
Here is a rundown of some of the big projects in the works east of Lexington Avenue.
205 East 92nd Street
Related Companies is building the Upper East Side’s largest project and the only ground-up rental development. Designed by Handel Architects, the 465,000-square-foot, 231-unit mixed-use building will rise 36 stories.
Related acquired the land at 205 East 92nd Street, between Second and Third avenues, from the city for just $10 million in 1983. The plot had been a public playground and the terms of the deal required Related to maintain the open space until 2008. When the developer announced plans to close the park in 2009 and build a residential tower at the site, a backlash ensued over the loss of community space.
In a conciliatory move, Related added 12,000 square feet of open space. In addition, the base of the tower will be home to a 46,000-square-foot school for children with learning disabilities. There will be another 33,000 square feet of retail space, including an Equinox gym. The project, which is slated for completion early this year, includes 47 affordable units. Prices have not yet been disclosed for the market-rate units.
360 East 89th Street
One block east of the forthcoming Second Avenue subway, Anbau is getting ready to launch sales at its 84-unit condo tower at 360 East 89th Street in early 2016.
The developer’s $33 million site purchase was comprised of three buildings at 1711-1715 First Avenue. In 2014, the firm filed plans for a 34-story residential development with roughly 3,500 square feet of ground-floor retail.
Dubbed Citizen360, the condo will target the affordable luxury sector with prices expected to range from $1.3 million to $14 million. Construction is well underway, which has not been lost on neighbors who have complained about “deafening” construction noise.
Designed by SHoP Architects, the building has floor-to-ceiling windows and 360-degree exposures above the sixth floor. Amenities include a catering kitchen and a mechanical parking system that transports cars. Corcoran Sunshine Marketing Group is selling the units.
1562 Second Avenue
Icon Realty Management’s Terrence Lowenberg and Todd Cohen seize opportunity where they see it. And they saw it on a two-block stretch of Second Avenue, which sits in the heart of a new submarket that will be serviced by the Second Avenue subway.
In 2014, Icon paid $44.8 million for a pair of development sites on the east side of Second between 80th and 82nd streets. This past August, Icon began demolishing the low-rise tenements at the sites making way for two luxury, mixed-use projects that will house condos and retail.
Plans haven’t been disclosed for 1538 Second. But at 1562 Second, Icon filed plans last year for a 14-story Isaac & Stern-designed tower. The prewar-style building will contain 12 apartments with large windows and terraces. Icon, which owns 1,800 apartments throughout the city, has also invested elsewhere on the Upper East Side, including a development at 985 Park Avenue, a seven-unit condo.
1059 Third Avenue
Back in 2012, Florida developer Chance Gordy made his first bet on NYC, forking over more than $30 million for a development site at 1059 Third Avenue, near 63rd street.
The 67-unit, 30-story condo is currently under construction.
Gordy’s Inverland Development is partnering with the South Carolina-based Third Palm Capital on the project. The duo bought the site from an entity associated with the Battaglia family.
The planned tower will be designed by Manuel Glas Architects and will have retail and office on the second, third and fourth floors. The rendering, left, shows only the height, not the design. Units will average 1,500 square feet. Prices have not been disclosed, but Corcoran Group’s Tamir Shemesh will be marketing the project.
180 East 88th Street
Rising 521 feet, developer Joe McMillan’s luxury condo tower at 180 East 88th Street will be the tallest building north of 72nd Street when it’s completed in 2018.
McMillan’s Tribeca-based DDG bought the site from Muss Development in 2013, paying $68 million, or $538 per buildable square foot, making it one of the riskier deals in the condo development world at the time. In 2015, the developer demolished three low-rise walkups at the site, located on Third Avenue between 87th and 88th streets, paving the way for the 31-story residential tower. Over the summer, the developer broke ground on the project, which will feature 30-foot-high masonry arches and a brick façade imported from Denmark.
In November, DDG received the green light from the AG’s office to begin selling apartments. It’s aiming for a total sellout of $308 million, including its storage units.
389 East 89th Street
Ben Shaoul — one of the most prolific developers in the city — is behind the Upper East Side’s largest condo development, a 156-unit rental conversion at 389 East 89th Street, on the corner of First Avenue. “It’s brand new, we’ve just given it an interior facelift,” said Shaoul of the property, which was built in 2003.
Shaoul’s firm, Magnum, purchased the property, along with a 133-unit building at 385 First Avenue in Gramercy Park, for $270 million from Atlanta-based Post Properties in 2014. The acquisition came just ahead of the buildings’ June 2015 tax-benefit expiration, which effectively ended rent-stabilization in the properties.
At the 31-story Post Toscana, as the 89th Street building is known, Magnum is aiming for a $265.2 million total sellout with prices starting at $900,000 for one-bedroom units. The vast majority of the units are around $1 million, and the building’s average asking price is $1,625 per foot, according to its offering plan. The building also has 11,700 square feet of retail space.
Despite the relatively low price point, the units have high-end finishes and appliances.
“If my company didn’t have so much other development going on and such buying power with vendors, we’d never be able to deliver this level of finishes for this price point,” Shaoul said. Sales are being handled by Corcoran Sunshine and are set to launch in early 2016.
20 East End Avenue
Although 20 East End Avenue is smaller than his other projects, Robert A.M. Stern’s new Upper East Side condo on 80th Street was dubbed an “instant classic” thanks to its limestone-clad façade and classic design.
Developers Corigin Real Estate Group, headed by Ryan Freedman, and Florida East Coast Realty paid $61.75 million in 2012 for the site, a former research building owned by the City University of New York. In all, the building has 43 two- to six-bedroom condos, including three duplex townhomes and two penthouses. Prices start at $4.5 million, and amenities include a porte-cochère and motor court, billiards room, 8,000-bottle wine cellar, children’s game room, gym and spa.
The 17-story building topped out in November, just after two penthouses hit the market for a combined $62 million — or separately for $35 million and $27 million. As of December 2015, the building was 60 percent sold.