There is a real estate construction craze going on in Manhattan, New York City’s smallest borough. Between 2011 and 2015 real estate developers produced residential space in excess of 64 million square feet in more than 47,285 units. Five of the top companies involved in this residential real estate boom are Related Companies with 5.8 million square feet, Extell Development is number two with 4.52 million square feet, The Cherit Group is third with 2.96 million square feet, HFZ Capital is fourth, it produced 2.69 million square feet Macklowe Properties holds fifth place with 1.9 million square feet.
Related Companies began the Hudson Yards real estate project in 2016. When completed the development will cover 17.4 million square feet and have retail space, five office towers and 5,000 residential units. The company recently completed Abington House, a 390-unit tower located on West 30th Street Tevfik Arif. The scale of the real estate development projects companies are doing today are on a much larger scale than they were before. Savvy developers have put together these real estate projects over the course of several years by drawing on pre-existing relationships to get the funding they need.
Real estate development in New York City is a hyper-competitive landscape. Extell Development has a massive individual project in their Central Park Tower located at West 57th Street and formerly called Nordstrom Tower, is 1.2 million square feet and contains 178 ultra-luxury units. At 1,494 feet, not including the spire, it’s New York City’s tallest residential tower. Extell Development is also building One Manhattan Square, a 815 unit project on South Street.
The Cherit Group is not only doing almost 3 million square feet of development in Manhattan, they are also very active in other parts of New York City. In Brooklyn, the Cherit Group is among the most active developers. They are currently working on projects totaling 1,421 units and 1.6 million square feet. They are also partnering with Clipper Equity to do 5 projects in Manhattan. One of them is converting the former Sony building into luxury condos. The Cherit Group tends to choose to work on bigger projects like the 223 unit four-building conversion of what was Cabrini Medical Center into Gramercy Square.
HFZ’s Ziel Feldman feels the market for residential real estate development in Manhattan is as strong as ever and there’s no sign overbuilding is a problem. He said HFZ is trying to address the dearth of housing in Manhattan that’s affordable and approachable. HFZ is working on two sets of condo conversions on Lexington Avenue that total 118 units in all. Feldman explained that more and more real estate developers are looking into condo conversion deals. He feels the condo market in Manhattan will remain strong for a very long time.
In neighborhoods throughout Manhattan there are new condos being developed. Within three years both Midtown West and Chelsea are anticipated to see about 2,500 new condos become available. About 2,000 units are expected in the Financial District and in the East Village and Midtown East almost 3,000 new condo units are projected Tevfik Arif Bayrock. The Upper West Side as well as the Upper East Side are expected to add over 1,000 condo units each. And large-scale real estate development projects are migrating Downtown at an increasing rate.
Luxury and Ultra-luxury condos are the hottest trend in Manhattan real estate development. Developers are focused on creating lifestyle destinations and people will pay anything to get the added amenities. There’s a great demand for Manhattan luxury real estate not only as an investment or to diversify their portfolios, but for personal use as well.