Slow and steady, the East 50s catch up

Oct.October 22, 2007 03:24 PM

A staid area of Manhattan’s East Side has seen a spate of new development recently, along with more interest from buyers.

While residential developments have been popping up all around Manhattan in the past several years, the East 50s have lagged behind. But now several new projects are coming online in the area.

The new developments include 441 East 57th Street, an eight-unit condominium being developed by Flank Architecture and Development; 330 East 57th Street, which has 14 full-floor units and is being developed by Cesidio del Rio; and the Veneto at 250 East 53rd Street, which is being developed by the Related Companies. The 34-story, 137-unit building sold half its units in its first three months of sales this past summer. Across Second Avenue from the Veneto, Macklowe Properties is developing the 31-story, 88-unit ThreeTen condo at 310 East 53rd Street. Also, Arun Bhatia’s development company is constructing the Capri at 235 East 55th Street, a 40-unit condo conversion on top of a Marymount College dorm.

To many, the East 50s, which contain the north part of Turtle Bay, seem like a remote and forgotten part of the East Side. Sandwiched between the family-friendly Upper East Side and the post-collegiate mecca of Murray Hill, the area, which has a lot of one-bedrooms and junior fours, is known for appealing largely to empty nesters. Developers of new construction are marketing to those empty nesters, but trying to appeal to families as well.

“It’s one of the areas that has not kept up pace with the rest of the market,” said Andy Gerringer, managing director of Prudential Douglas Elliman’s development marketing group. “It is not a real family location.”

“Turtle Bay tends to be less expensive than other areas,” added Neal Sroka, senior vice president with the Corcoran Group.

Many of the area’s empty nesters are from Nassau and Suffolk Counties; they gravitate to Turtle Bay/Midtown East to be near their children who have settled just to the south in Murray Hill, which is popular for Long Island twentysomethings just out of college. In addition, the proximity to Long Island appeals to former residents who visit friends and family in the suburbs, brokers said.

According to appraisal firm of Miller Samuel, the Turtle Bay/Midtown East neighborhood has trended toward less expensive sale prices per square foot for condos and co-ops. In the fourth quarter of 2006, Turtle Bay condos sold on average for $1,009 a square foot, as opposed to $1,268 for Lincoln Center, $1,060 on the West Side, $1,054 on the Upper West Side and $1,010 Downtown.

Sroka said international buyers who work at the United Nations are attracted to the neighborhood. In particular, he noted many Koreans have purchased in the area in recent years.

David Lowenfeld, executive vice president of the World-Wide Group, said new stores, proximity to Midtown offices and easy travel for weekend trips should make the area a draw for young families as well.

While other neighborhoods have the land or available property to facilitate development — like the open spaces of the far West Side and the office buildings ripe for condo conversion in the Financial District — lack of either in the East 50s puts a hurdle in the way of developers, who have to assemble sites to gain space for new projects.

The World-Wide Group’s new development in the East 50s is an example of one of the ways a developer puts together a site in the neighborhood. In order to build a 450,000-square-foot residential tower at 250 East 57th Street, the development company agreed to build two new schools on the site for the city.

World-Wide is in the process of building a 900,000-square-foot, three phase, multi-use structure on the site. The first phase will include rebuilding the High School for Art and Design and Public School 59. This includes expanding P.S. 59 from 450 students to 730 students.

“The barriers to development there are more challenging,” Lowenfeld said. “As a result the residential market had to rise to the level.”

World-Wide was also the builder of the Milan Tower on East 55th Street and Second Avenue. In order to build the Milan, Lowenfeld said the company had to purchase several other buildings to get the right amount of land. “There was a lot of demand for that project from people moving in from the suburbs and young families,” Lowenfeld said of the Milan.

For its latest project, World-Wide is currently working on the design process with the School Construction Authority and then will move into the residential component of the plan. The third phase will be a 170,000-square-foot retail component; Lowenfeld said several grocery stores have expressed interest. The facility is expected to be completed 2011.

In the new buildings, mainly one- and two-bedroom units have been developed. However, Gerringer noted the layouts lend themselves to combination apartments. Brokers have been providing sample blueprints in case tenants have larger families and wanted to combine apartments.


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