The Real Deal New York

New rentals polish rough edges of Hell’s Kitchen

By Lauren Elkies | October 19, 2007 04:43PM

Hell’s Kitchen, the scene of a transformation from rough neighborhood to diner’s paradise, can now claim another element of change as developers make it one of the hottest areas in the city for new rental buildings.

The neighborhood, which extends from West 34th Street to 57th Street west of Eighth Avenue to the Hudson River, buzzes with hipster restaurants and bars. It is now also a hive of activity in terms of new construction, with luxury condominiums and rental buildings springing up along the far West Side.

“You’ve got more rentals going up there than any other area,” said Soozy Katzen, director of relocation services at Fox Residential Group.

It’s the area that has most benefited from the surging rental market, said Gordon Golub, senior managing director at Citi Habitats.

Marc Lewis, vice president and managing director of Manhattan Apartments, agreed.

“People want to live in Midtown now,” Lewis said. “They have a much different attitude about living on the far West Side than they used to.” In particular, the West 50s have benefited from the Times Square revitalization, he said.

The large-scale luxury condominium market contributed to the resurgence of far West 42nd Street, and several high-rise condo towers are now under construction.

Demolition is expected to start this month at 605 West 42nd Street, where the Moinian Group and investor MacFarlane Partners plan to build a mixed-use tower with two peaks that include 1,000 rental and condominium units. Also this month, Moinian is anticipating move-ins at Atelier, his recently completed neighboring condo building at 635 West 42nd Street.

Developer Larry Silverstein is working on River Place II on far West 42nd Street, which will accompany the 900-unit rental River Place I, erected in 2000. River Place II, a massive 57-story rental tower with 1,550 units at 600 West 42nd Street, will be one of the largest rental developments seen in recent years. Construction is expected to begin this month, according to Dara McQuillan, a spokesperson for Silverstein Properties.

The Related Companies, Twining Properties and MacFarlane Partners are working on a mixed-use development, including rental apartments, at 440 West 42nd Street between Ninth and 10th avenues. The Dermot Company and Archstone-Smith are working on the Mosaic, a mixed-use project with two primarily high-end luxury rental towers spanning from 51st to 53rd streets along 10th Avenue. The Witkoff Group is reportedly constructing a mixed-use rental development at 44th Street and Eighth Avenue.

One-bedrooms in Midtown West rented for an average of $2,684 in November, according to the most recent data from Citi Habitats, only $73 less than the Manhattan-wide average. The November vacancy rate in Midtown West was lower than in the rest of Manhattan, at an average 0.7 percent versus 0.81.

Rental developments that are already fetching high rents on the far West Side include the Nicole at 400 West 55th Street, the Marc at 900 Eighth Avenue, the Westport at 500 West 56th Street and the environmentally friendly Helena at 601 West 57th Street, all of which opened in the last few years.

“These are all sleek new developments,” said Christopher Lops, a managing director at Citi Habitats’ West 57th Street office. “This isn’t the Hell’s Kitchen of old with the tenement buildings.”

David Walentas’ Two Trees Management went into contract in early September to buy an 11th Avenue site where it hopes to build up to 1,000 apartments, the New York Post reported. Two Trees will buy most of the block on the east side of the avenue between 53rd and 54th streets. Walentas wants the city to rezone the land from its current manufacturing-commercial designation to residential, which would enable him to build apartments as well as new stores, parking and community-use facilities.

Unlike the more remote avenues farther west, Eighth Avenue is already an established neighborhood, said Stephen Kotler, an executive vice president and manager in the Midtown office of Prudential Douglas Elliman. Farther west, he said, it’s still emerging.

“There’s a lot of undeveloped areas there still,” Kotler said.

Developers will likely focus on building in the 40s and the 50s from Ninth to 12th avenues, “because acquisition costs are still relatively lower there than rest of city,” he said.

Rents are climbing on the far West Side. A two-bedroom apartment on West 43rd Street just off Ninth Avenue went on the market for $2,700 last month. That same apartment was rented for $2,200 in 2005, said Golub of Citi Habitats.

Dramatic price increases on the far West Side reflect the fact that apartments were below market in Hell’s Kitchen last year, said Lops.

The far West Side has a hopping nightlife and restaurant scene and ample retail offerings, he said. Companies such as the New York Times are also investing in the area.

“Ninth Avenue has become a hotbed for fantastic restaurants and nightlife,” Lops said. “Ninth Avenue’s really what’s happening right now. That’s what’s exploding.”

At the Marc, rents average $55 a square foot, a figure usually seen in more established neighborhoods, said Kotler.

Lewis said rents in the West 40s and 50s now exceed rents on the Upper East Side. He said he knows a landlord with a building on the Upper East Side that struggles to rent a walk-up studio for $1,300 to $1,500. A comparable apartment the property owner has in the West 40s easily rents for $1,500 to 1,600.

The expansion of the Jacob K. Javits Center, the development of the West Side Rail Yards and the extension of the No. 7 subway line to the south will have a ripple effect on the streets farther north, drawing more residents to rental buildings on the far West Side, brokers say.

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