The nationwide credit crisis has reared its ugly head, but that doesn’t mean development opportunities have disappeared in New York City.
This month, The Real Deal explores the outlook for new condo projects in a series of stories.
So how does the market look? Here’s how the numbers break down: About 34,000 residential units are expected to be completed this year in the city, the most since 1972. But the number of new condo offering plans submitted to the attorney general’s office during the first three quarters, an indicator of projects that will start sales in a year or two, is dropping off. Filings were down 31 percent over last year citywide and down 48 percent in Manhattan, the biggest slide of any borough, indicating some pessimism about the viability of condo projects going forward (see Developers scale back future plans).
In this market, it pays to be creative, like developers who are doing hybrid condo and hotel projects such as the Moinian Group’s W New York Downtown and the Hakimian Organization’s 75 Wall Street. Some observers say these types of projects leverage the strength of a strong hotel market as a hedge against a weaker condo market (see Developers hedge their bets with condo and hotel combos).
Other developers are doing rental development, but face plenty of challenges thanks to the sky-high costs of land and construction (see How to do a rental in 2007). It also helps to be flexible, especially when looking for space. Developers looking for open spots in Manhattan are finding them mostly Uptown and in the Hudson Yards area (see Are we running out of room?).
But some fringe neighborhoods are finding themselves teetering on the edge. Crown Heights and Sunset Park/Greenwood, for example, seem to be feeling some pain, while Long Island City and Williamsburg appear to be weathering the credit storm’s effects.
Still, market conditions here are a far cry from the woes experienced in the rest of the country, and many players remain unperturbed by recent tremors. “I only worry when New York City is not an ‘in’ place to visit or live in,” said Joseph Moinian, CEO of the Moinian Group. “As long as we have those two, we have nothing to worry about.”
Developers scale back future plans
Go to chart: New condo units by borough
Developers hedge their bets with condo and hotel combos