The conversion of Walker Tower, the 24-story Art Deco office building at 212 West 18th Street transformed into 47 luxury condos in Chelsea has been completed. The condo conversion attracted a significant amount of attention from buyers around the world, selling all but PH2 (5 Beds, 6,738 ft², $47.5M) before construction was completed. The new construction project is garnering even more attention now that the first resale has been recorded at 150% the initial offering price, 18 months after the contract was signed by the original buyer.
The two-bedroom, 2,183 ft² unit, #11E went into contract in June 2012 for $5,027,609 ($2.179/ft²), 4% less than the sponsor’s asking price. Two weeks after the deal closed in December of 2013, the unit was sold for $7,775,000 ($3,568/ft²) realizing close to a $3 million profit on the first owner’s initial investment.
The initial investment of new construction projects in Manhattan’s real estate market typically require a 20% down payment to secure the contract as the project undergoes construction or conversion. Taking this into consideration, the initial investment on unit #11E discussed above would have been roughly $1 million, 20% of the contract price. If we consider* that the other 80% could have been leveraged, the realized cash-on-cash return on the trade of unit #11E was 273%.
The question of real estate investment in New York, just like all good investments is about price and timing. As brokers with over 30 years of experience, Mercedes Berk believes there is a very limited and unique opportunity to put your money to work in New York’s high performing real estate market.
The luxury market has been underserved since 2008 and there is a surge in new construction in response to the overwhelming demand for new product. In 2013, only 2,269 new units came to market, which is 25% less than the average 3,000 required to meet demand. There are approximately 10,000 new units scheduled to come to market over the next three years. Below we have listed 43 of Manhattan’s new development projects ranging from $1,428/ft² – $6,894/ft². Prices in New York will only go up as developers will be forced to charge even higher prices for new product in response to historically high land prices. Savvy investors realize that the earlier you sign a contract on a new construction project, the more room there is for greater returns.
There are of course, other major projects in New York’s new development pipeline that we look forward to. As always, for more information, or confidential inquiries, please contact:
Noel Berk, principal
firstname.lastname@example.org | 212.371.4065
Elizabeth Omedes, principal
email@example.com | 917.371.0075