By C.J. Hughes
First, corporations relocated there. Then, tourists streamed back. Now, Times Square, which in the past 15 years has seen a dramatic reversal of fortune as sex shops gave way to family-friendly eateries, is bracing for thousands of new residents.
Escalating a trend that began in earnest earlier this decade, a crop of high-rise rentals is slated for West 42nd Street, just outside the core entertainment district, on land once occupied by parking lots.
Historically, developers have used rentals to establish the residential bona fides of a neighborhood before undertaking more ambitious condo projects. That’s the model that the Financial District has experienced in recent years, brokers said.
But on West 42nd Street, the projects are more than just place-holders, in terms of their scale (which could easily be described as enormous) and their finishes, considered top-of-the-line.
Embodying both of those qualities is Silver Towers, a sprawling aluminum-and-glass complex located at 600 West 42nd Street, on a lot that stretches along 11th Avenue to West 41st Street.
With 1,359 studios to two-bedrooms, it will be the largest single-structure apartment complex in the city, and possibly in the country, when completed in 2010, brokers said.
Most apartments will be located in twin 60-story towers, which were slated to be topped off last month, said Jack Klein, a vice president with Silverstein Properties, the developer. There will be four 6,000-square-foot retail berths clustered around a courtyard, and a 13-story tower with 84 units of affordable housing, he said.
Like high-end condos, Silver Towers’ units will feature expensive finishes such as granite counters, glass-doored kitchen cabinets and stainless-steel appliances. (Silverstein is not aspiring to LEED certification, Klein said.)
Market-rate renters will move in next spring. Though prices haven’t been officially set, studios should start in the “low $2,000s,” said Sandi Rotkoff of Citi Habitats, which is marketing the property.
Though office buildings and condos were once considered for the site, which Silverstein Properties has owned since 1985, Klein said that apartments play to the area’s changing demographics.
“It will appeal to people who have just come to New York, to young people and to people who don’t want to buy until the sales market bottoms out,” he said.
Others might come to be near nightlife, which could be enhanced by the addition of 440 West 42nd Street, a 58-story tower with 600 apartments and 150 condos from the Related Companies. The project will also have 1.2 million square feet of retail, office and “cultural” space, according to Joanna Rose, a spokeswoman for the company. But a 1,800-seat theater proposed earlier for Cirque du Soleil is now off the table.
Rose said no timeline has been set yet for the project, which hasn’t been named. But, she noted, the foundation has been poured.
Lately, profit margins on rentals haven’t been enough to cover development costs, which have skyrocketed in recent years. But jazz up the units with enough luxury finishes and the price points could rise enough to make rentals workable, brokers said.
That could explain 605 West 42nd Street, a 61-story high-rise planned by the Moinian Group for the northwestern corner of 11th Avenue, on four parcels that once included a garage and gas station.
Rather than exactly mimic Moinian’s existing Atelier, a nearby 46-story tower with 478 condos, 605 West 42nd will offer 970 rentals, from studios to three-bedrooms, among the 1,055 units at its site, with the other 85 to be condos, said Michael Buckley, the project manager. Foundations are now being poured, Buckley added, with construction to start in October; occupancy is slated for spring 2010.
Like in Silver Towers, the interiors at 605 West 42nd will be many cuts above run-of-the-mill, as Philippe Starck, the designer, will style them. There will also be a rooftop pool atop the podium linking the two towers.
These touches could boost rents above what Silverstein will ask, Buckley said, as a 600-square-foot studio could go for $3,000 a month. The market can support those prices, he added, even it it’s about to be flooded with new homes.
“Competition exists when there is scarcity of a product,” Buckley said.
While the current projects may be sizeable, they are not pioneers. An earlier project — 420 West 42nd Street — was developed jointly in 2001 by the Brodsky Organization and Quinlan and Field. It offers 264 units in a brown-striped 41-story tower.
Another early project was the 45-story beige-brick Victory, developed by Sidney Fetner Associates, with 417 units at 561 10th Avenue. In late July, studios there were leasing for $2,390 and two-bedrooms for $4,790, according to the building’s rental office.
Silverstein, too, placed a previous bet on the neighborhood. His River Place, which sits on the same full-block lot as Silver Towers (separated by a park), wrapped up in 2001. Its 921 units, from studios to two-bedrooms, start at $2,300, according to its rental office.
And while turnover may be frequent, the average occupancy rate at River Place is 97 percent, Klein said.
That comes despite a relative lack of services. Clothing and housewares stores are few in the blocks west of Ninth Avenue. And public transportation options are slim. (But the now-closed Market Diner, a longtime restaurant at 11th Avenue and West 43rd Street, will reopen with outdoor seating, said Buckley of the Moinian Group, which owns it.)
Though the city promised to extend the No. 7 subway train, the M42 bus line is the only immediate option, said Tim Tompkins, president of the Times Square Alliance, a business improvement district representing 560 stores. Tompkins has lived on Ninth Avenue and West 44th Street for 15 years.
Still, some new residents likely don’t have far to commute to work. Tompkins suggested that residents at the new rental buildings could be employees of companies headquartered within walking distance, such as Reuters, Condé Nast and Ernst & Young.
“It wouldn’t surprise me at all if they worked in this new office district,” Tompkins said.
Perhaps as a result, bargains are hard to come by. The average studio in Midtown West costs $2,123, according to the second-quarter report from brokerage firm Citi Habitats. That represents a 16 percent leap in two years. It also puts the neighborhood in the top half of 15 Manhattan neighborhoods surveyed, the report showed.
And adding so much new supply to the market won’t likely depress prices, said Gary Malin, Citi Habitats’ president, as demand is strong and growing. In fact, even though Wall Street firms are laying people off, they account for just five percent of the city’s jobs, he pointed out.
And, renters previously pushed to the outer boroughs are eager to come back, he said.
“They will say, ‘Does this make sense for me now?'” he said. “And the answer will be, ‘Yes.'”