A relentlessly booming real estate market has compelled developers to construct and reconstruct buildings in every nook and cranny of the island of Manhattan to produce condominiums for equity-hungry residents and investors. But one storied neighborhood has been hiding in plain sight.
Until now.
Herald Square’s glory days reach back to the 1934 holiday classic, “Miracle on 34th Street,” and Macy’s flagship store still looms large. But the area is also known as the vibrant Koreatown that’s sprung up in the low 30s, as well as cheap wholesale shops working at the edges of the fashion trade. Less appealingly, it’s home to some of the overflow seediness of Penn Station rundown commuter bars and adult DVD shops.
Home sweet home it’s not.
“Herald Square has not been known as a residential area,” says Bob Posner, whose advertising agency has been assigned to promote the massive new Herald Towers condominium just across from Macy’s. “But, just as Chelsea has given way to Chelsea Heights above 26th Street and below 30th Street everyone is anticipating a great deal of residential appreciation in the West 30s.”
The 692-unit Herald Towers project is the biggest new Manhattan residential development in number of units in at least the last five years, save for the conversion to condos of the 1,429-unit Ruppert Yorkville Towers on the Upper East Side in 2002, according to the state Attorney General’s office.
Property Markets Group is the developer of the residential part of the building, located at 50 West 34th Street, leaving the 100,000-square-foot ground floor component to JEMB Realty Corp. The retail level includes a Gap store, which, claims PMG principal Elliott Joseph, “is the highest-grossing Gap per square foot in the universe.”
The question is, who wants to live above the largest magnet in the universe for mid-priced clothes shoppers?
Young professionals, possibly.
“The building hits a price point in the market that first-time buyers can afford,” says Joseph, whose firm is also developing the upscale 823 Park Avenue (see page 27). Of Herald Towers’ apartments, 330 are studios and 280 are one-bedrooms a suitable mix for young singles and couples.
The building opened “soft,” before its official launch on July 14, and, according to Joseph, “we started selling studios in the low $300,000s. We were inundated with buyers and have raised prices three times due to the incredible demand.”
Studios from 450 to 525 square feet have settled in the low-$400,000s; one-bedrooms around 650 square feet are priced in the $500,000s to $700,000s; and two-bedrooms around 1,000 square feet are in the $800,000s. The project will be sold by Citi Habitats Marketing Group.
The 25-story three-tower complex was converted from the famous 1,620-room McAlpin Hotel, built in 1915, to high-end rental apartments in 1979. The structure and individual apartments have been upgraded during the last seven years by JEMB Realty.
Apartments have the advantage of such prewar details as soundproof poured-concrete floors and walls, and oversized windows. Residents have access to a spacious New York Sports Club with rooftop sundeck at the penthouse level.
While Herald Towers is the first important for-sale project on Herald Square, several large rental buildings are also trying to draw young professionals to the area. The Gotham Organization opened the 48-story Atlas at 66 West 38th Street, right on Sixth Avenue, in 2002. Gotham sought to make the building a community unto itself.
“We pay a lot of attention to the common areas, to make them more inviting and comfortable,” says Gotham president David Picket. “We did the lobby as a lounge it’s almost like you’re in a club. We try to extend people’s homes into the public area.”
The building offers yoga and exercise classes, wine and cheese socials, and sushi tastings; the fitness center has an adjoining lounge with a coffee bar offering continental breakfast; the rooftop terrace shows movies and has social events in the summer.
Tower 31, a 41-story Costas Kondylis-designed building now under construction at 9 West 31st Street, will offer 283 new rental apartments when it is completed in 2006. Elsewhere, the 34-story Magellan, the first Manhattan development for Pennsylvania-based Pitcairn Properties, opened in 2003 at 35 West 33rd Street, going for a similar young professional demographic.
Typically, a confluence of rental properties builds demand for apartment ownership in an area, as it has in the far West 40s and in Lower Manhattan. And the shops which are bound to spring up to serve the residents of the giant new condominium high-rises settling onto Fifth Avenue in the 30s will be a short walk from Herald Square.
With these factors in place and if Herald Towers proves to be a success Herald Square and environs could see more condominium conversion and new construction in the very near future, developers say.