Lofts tend to spring up in neighborhoods that are quiet. The desertion of industry and commerce from the area is often the condition that allows for the creation of lofts in the first place.
So if you want a loft in a quiet neighborhood, there are plenty to choose from – Tribeca, Dumbo, the far West 20s.
But if you want a loft in one of the most central and dynamic areas in Manhattan, go to Union Square.
The area, hot since the mid-1990s following decades of decline, continues to be “young, exciting, trendy, upbeat and high-class,” says Douglas Wagner, president of Benjamin James real estate agency. “Between theater, restaurants and parks, there is something for everybody down here.” Over 100,000 students more than Ohio State and Notre Dame combined – are enrolled at nearby schools and suffuse the area, whose top attractions include the Union Square Greenmarket, called the best farmers market in the country, top restaurants like the Union Square Cafe , trendy nightlife, mega-music stores, and one of the city s most central subway hubs.
WHO LIVES THERE
While young students might provide for much of the area’s vibrancy, they are unsurprisingly not the ones living in the area s choice apartments – the high-priced lofts overlooking Union Square Park. Ken Scheff, Director of Sales for Downtown at Stribling & Associates, says that the loft district extends from Park Avenue South, Union Square s eastern boundary, to 7th Avenue, well beyond the neighborhood s western edge. There are some eight to 10 rental buildings in the Union Square area that cater to college students and new hires, including two New York University dorms. To the east of the neighborhood, one starts to run into more co-op buildings.
Those who buy lofts on Union Square Park are a broad mix. “Largely it s people who are attracted to the cultural landscape,” says Wagner. “We see people with a bit of a pop culture aspect, people who work in food services and entertainment. Buyers are generally at the top of their career.” Young professionals and baby boomer empty nesters are also buyers in the area. “We see people coming back from the suburbs to buy here,” said Scheff. He said there are few families in the area, but Rob Gross, a senior vice president at Douglas Elliman who lives nearby with his family, said they are “not as much of a minority as one might think.” Gross said he sees a diverse range of buyers. “There are straight couples and gay couples, and people in the arts, like photographers, who work at home,” he said.
VACANCY AND PRICES
While residential vacancy is very low in the area around 1.5 percent Gross said there has been some softness in the market for apartments above 3,200 square feet. “Three or four years ago, large wholesale spaces were more in demand,” he said. These days, he said, an increasing approach among developers “is to go smaller and let people combine apartments instead.” The mid-loft range from around $1 to $1.5 million has been strong, however. Gross gave the example of a 1,600 square foot loft at 105 Fifth Ave., above Barnes & Noble on the western edge of the Union Square neighborhood, that he recently sold in ten days. Gross said raw, unimproved space in the area runs around $500 to $600 a square foot, average properties run between $600 and $800 a square foot, and condos with high-end finishes go for around $700 to $900 a square foot.
Zeckendorf Towers, the 652-apartment condominium and office complex whose opening at the southeast corner of the park in 1987 heralded a resurgence in a neighborhood that had long been in bad shape, continues to remain a popular address. Douglas Elliman recently opened up an office in the building. Scheff said there is a “good mix” of residents in the building, including more families than elsewhere in the neighborhood, and a good gym. But he also pointed out that the apartments built there are generally “more modest than what is built today. So you see a lot of apartments combined.” Prices run about $800 a square foot in the building, he said, and in some cases those prices could be much higher than the averages.
DEVELOPMENT IN AREA
As far as new development in the neighborhood, there is very little, said James. “For the time being, it sort of is what it is,” he said. “There aren t a lot of new parcels out there,” said Gross.
One exception, though at 21st Street, a bit north of the neighborhood, is a project at 260 Park Ave. being handled by the Douglas Elliman Development Marketing Group.
The project is a conversion of the former Manhattan headquarters of the United Federation of Teachers Union. The 200,000 square-foot building will be converted into approximately 100 one- to three-bedroom condominiums, with ground floor retail stores and basement space that will include storage for the unit owners.
While from a residential point of view, “gentrification is complete,” according to Scheff, the area is still evolving on the retail front, particularly on 14th Street. The “green” image established by the Union Square Greenmarket will be further bolstered by Vornado Realty Trust s redevelopment of the former Bradlees Department store on the southern side of Union Square Park. The building will have a 50,000 sf Whole Foods, though an opening date hasn t been announced. Forever 21, the juniors retailer, also signed a lease last fall for a two-level, 26,000-square-foot store in the 4 Union Square South building. Cantor Fitzgerald, the bond broker that lost 658 employees in the attack on the World Trade Center, has floated an idea to build a new headquarters on the upper floors of the building.
REINVENTING 14TH ST.
Fourteenth Street, the main east-west artery passing through Union Square, has seen improvements in recent years, but still lags behind the rest of the area in terms of commercial development. One broker said he believes that 14th Street is “about halfway done.” “It s not going to change with a crash and a bang,” says Gross.
Another place that continues to evolve in terms of retail is the neighborhood s side streets. “The side streets are getting a bit more energized,” said Gross. “17th Street [between Broadway and Fifth Avenue] is a good example. You’ve got nice little casual restaurants. You ve got places like City Bakery nearby.” Overall, he said, “I’m really seeing restaurants and retail keeping pace in the area. Everything is becoming more sophisticated.”
Wagner had a different take on the situation, however, saying he was seeing more vacancies in the area than he had in the last ten years.
“I walk each day from 20th Street and Broadway to 14th Street and Fifth Avenue. I’m seeing store vacancies left and right.” He said storefronts cost upwards of $20,000 a month, a situation that is “too challenging for tenants.” Landlords are holding out for high prices, “waiting for companies to feel the confidence to take space,” but Wagner said what might happen is that the market will see a correction, and rents will come down.
Even if vacancies are up, Union Square remains red hot. A century ago, that was also the case. In the 1900s, it was the cultural and political epicenter of the city, with the Academy of Music, vaudeville theaters and Tammany Hall. Macy’s, Tiffany’s and other major retailers lined 14th Street.
A new generation of department stores came in during later years, but around 35 years ago the area began to slide into deterioration, its middle-class shops shuttered and Union Square became a mecca for drug dealers and the homeless. A turnaround eventually came, helped by the Greenmarket, a multi-million dollar restoration of the Park, and the building of Zeckendorf Towers.
“People were talking about Union Square getting cleaned up back in 1987,” said Scheff. “I was embarrassed to mention it, because I didn’t think it would happen. But by 1995, the transformation was tremendous.”