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Thread: The Upper East Side: Bargain Rents

  1. #1

    Default The Upper East Side: Bargain Rents

    December 1, 2003

    Sorry, Your Wallet Says Upper East Side

    By SABRINA TAVERNISE

    Ah, the Upper East Side, land of fur coats, small dogs and boundless affluence. And now, much to the surprise of those without trust funds, it is also the land of bargain rents, at least by Manhattan's Himalayan standards.

    In a strange twist of real estate fate, the Upper East Side has become the neighborhood of choice for first-time renters in Manhattan. The reason is its new affordability. Though the stately avenues of Fifth and Park are as exclusive and expensive as ever, overall rents in the area have slumped, as higher earners have moved to hipper areas.

    "On a pure rent basis it is the best bargain in the city," said Andrew Heiberger, chief executive and founder of Citi Habitats, a large New York real estate brokerage firm.

    Throughout the 1990's, neighborhoods like Chelsea, the Upper West Side and the Lower East Side became fashionable spots for young professionals moving to Manhattan. That took some of the buzz — and the business — away from Upper East Side rental buildings east of Lexington Avenue.

    "It used to be all about the Upper East Side in the 1980's," said Pam Liebman, chief executive of the Corcoran Group. "But a lot of other neighborhoods have stolen those young people away."

    The Upper East Side, broadly defined as the area from 59th Street to 96th Street east of Central Park, had the lowest percentage increase in rent in Manhattan in the 1990's — 42 percent — according to figures from the 2000 census, which accounts for all rents, including those for rent-regulated apartments.

    In fact, the Upper East Side had a lower increase than East Harlem (48 percent) and Washington Heights (47 percent), though rents in the Upper East Side are still higher than rents in those areas.

    The area has also fallen the farthest in the recent economic slump. In the two years that ended in 2002, rents for new leases in two-bedroom apartments without a doorman on the Upper East Side declined by about 20 percent, while rents for the same type of apartment on the Upper West Side fell by about 12 percent, according to Halstead/Feathered Nest, a broker that provides annual rent analysis reports. (Brokers sometimes rent price-stabilized apartments, but the majority of their business is from market-rate rentals, and their statistics reflect this.)

    In the 1980's, the Upper East Side boomed with construction. Boxy new high-rises marched down Third Avenue, and the neighborhood became flooded with rental apartments.

    That oversupply slowed price increases, and bargain hunters have come calling. In April, Citi Habitats reported that about a fifth of all its new leases in the previous year were for the Upper East Side, more than in any other neighborhood. Eight years ago, the Upper East Side accounted for about 10 percent of its rental business, according to Gordon Golub, Upper East Side manager of Citi Habitats. And Corcoran said that in the past six months, its Internet site had had more hits for rental apartments on the Upper East Side than for any other area.

    The word "bargain" has, of course, long been relative in Manhattan. Sure, $1,000 a month would rent a palace elsewhere, but there are landlords in Manhattan asking $3,000 a month for 600-square-foot studios.

    Hoping to spend less than $1,000 a month for a Manhattan apartment, Maureen Atwell, a full-time student and a secretary, searched doggedly on the Internet.

    "I would type in my price range, and I would see really good things on the Upper East Side and really terrible things everywhere else," she said.

    Ms. Atwell had previously dismissed the area as "a very barren nothing land, a wasteland of rich people."

    "It was my last choice," she said. But the price was just about right; she found a studio on East 71st Street for $1,100 a month and moved in last fall.

    She was pleasantly surprised. Groceries and boutique restaurants line Second and Third Avenues. Bars on First Avenue throbbed with life at night. The only disappointment, Ms. Atwell said, was the absence of self-service laundromats.

    Nick Trippel, director of the social sciences computing lab at Hunter College, who moved to the area this spring, said he thought the area was "stodgy," and feared that he "would be living with people who all wear boat shoes and want to talk about their weekend trip to the Hamptons."

    Mr. Trippel chuckled as he recalled a recent conversation with a friend about his move into a one-bedroom apartment on East 82nd Street between Second and Third Avenues.

    "He said, `Oh, nice address.' He thought I had inherited a million dollars and was moving in with the swanks."

    "The perception is I have come into a lot of money," Mr. Trippel said, but the reality is I'm paying $1,200 a month in rent."

    Steadily rising rents throughout the 1980's and 1990's have increasingly made Manhattan a place for high earners. In the decade ending in 2000, overall apartment rents soared, according to census figures compiled by the Furman Center for Real Estate and Urban Policy at New York University. The biggest jump in Manhattan was on the Upper West Side, with a 60 percent rise in median monthly rents. The Furman Center found that the median rent on the Upper East Side had risen just 42 percent.

    It is not unusual to see young renters piled into Upper East Side apartments. At Normandie Court, a high-rise on Third Avenue and 95th Street, so many young tenants have erected wall-like partitions to create more rooms that the building is sometimes referred to as "Dormitory Court."

    Rachel Markison, 22, moved to Manhattan from Ann Arbor, Mich., and began teaching at Public School 31 in the Bronx in August. She lives at Normandie Court with three other people in a three-bedroom apartment with a wall making a fourth bedroom of the living room. Each pays less than $1,000.

    "It would be a lot less affordable if you didn't have the wall," she said, sitting in front of the building recently.

    Others move to the building for the social life. Lyon and Gabriel Orpaz, 25-year-old twins, said they liked the young atmosphere there. Lyon Orpaz moved there after he had broken up with his girlfriend and was looking for distraction.

    "The realtor said, `I know the perfect building for you,' " he said.

    His brother added: "There are floor parties. People from college just stop by. It is like a dorm in that sense."

    Though rents in the building were not bargain basement, Lyon Orpaz said, the apartments were attractive because the landlord was not very controlling. Flocks of friends swap rooms in apartments where wall-building policies are flexible.

    The lower crime rate on the Upper East Side distinguished it from other neighborhoods when crime soared in the city. But with the fall in crime over the past decade, the area has lost that advantage. So now, said Kenneth T. Jackson, history professor at Columbia University and president of the New-York Historical Society, it has to compete with the East Village and Hell's Kitchen for young renters.

    "The decline of crime has made us appreciate the funkiness," Professor Jackson said. "There's not much of a funky feeling to the Upper East Side. It seems homogenous."

    Professor Jackson also pointed to the meatpacking district in the far West Village. "Years ago, we would have said, `Yuck,' " he said. "We don't say `Yuck' as quickly anymore. People are looking for a bit of an edge."

    A neighborhood can have a bit of an edge, but renters want speed, space and reliability in their transportation. The Upper East Side's lone subway line, the Lexington Avenue line, is crammed with commuters during rush hour, leaving East Siders to envy the luxury of three lines on the West Side.

    The Lexington line "is God's own torture device," Ms. Atwell said. "At rush hour, it's so packed that every morning there would be this terrible fight."

    On a recent Thursday afternoon, old-timers at Reif's, a neighborhood bar that opened in 1942, talked about the changes over beer. The bar, just down Second Avenue from Normandie Court, is in an area that was once full of German and Irish immigrants, but that is now seeing an increase in younger renters.

    "A lot more kids up here are in their first jobs out of college," said Glenn Spellman, who has lived in the neighborhood for 14 years. "They put them two and three in an apartment."

    The bartender chimed in, "Moving vans, always moving vans."


    Copyright 2003 The New York Times Company

  2. #2
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    The late 90's and early 00's saw a lot of buildings go up as well. Interesting stuff, though. Let's see how East Harlem holds up over the next couple of years. Upper Upper East Side.

  3. #3

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    Updated On 10/01/08 at 03:09PM
    Sacred Heart buys $23M UES building for athletics



    406 East 91st Street



    By Adam Pincus

    The Convent of the Sacred Heart school paid Verizon New York $23 million for a three-story building on a 12,500-square-foot lot at 406 East 91st Street, more than six avenues east of its main campus at 1 East 91st Street at Fifth Avenue.

    The sale, which was first announced in July when it went into contract, closed September 26, according to property records published today.

    The school plans to build offices, a gym and a pool at the site, where Verizon has a 35,778-square-foot garage and repair center, the school said.

    A state filing by telecommunications provider Verizon said the school planned to demolish the garage, but Craig MacPherson, director of institutional advancement at the school, said a decision had not been made.

    “We are not far enough along at the moment to know how much of the current structure will remain or be changed, but we are keeping all of our options open. We hope to have firm plans for the space in early 2009,” he wrote in an email.

    The maximum building size allowed under current zoning would be an 81,828-square-foot structure, according to David Noonan, a broker on the sale and a principal with Newmark Knight Frank Capital Group. That size building costing $23 million, translates to $280 per buildable square foot, far less than the $500-plus-per-square-foot number seen in recent years for residential developments.

    "Don't draw any great conclusions about what residential land goes for on the Upper East Side because this is not a residential piece," he said.

    Noonan said construction at the site was limited by the zoning, which permits office, hotel and a small amount of residential use. The site drew bidders from other schools in the neighborhood as well as garages.

    Sacred Heart's Web site said the campus space currently used for a gym, weight room, locker rooms and gym offices would be converted to classrooms.

    Sacred Heart is a private school for girls from pre-kindergarten to 12th grade.
    Verizon, which acquired the property in 1971, plans to relocate the approximately 30 employees at the site to other locations in Upper Manhattan or the Bronx, the state filing said.

  4. #4
    NYC Aficionado from Oz Merry's Avatar
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    Interesting situation. Hopefully not that common?



    4 Bedrooms on UES for Under $2M (There's A Catch)

    November 27, 2010, by Bilal Khan



    Well, here's an interesting listing. This 2200 square foot 4 bedroom 3 bathroom unit at 343 East 74th Street aka The Forum is on the market for $1,750,000. That all sounds pretty prrretty good until you factor in the fact that monthly charges are going to be $5,611. If you'll remember this is the same building that was trying a $1.1 Million all-cash short sale for a penthouse triplex that was originally listed at $3.2 Million. It seems the reason for this building's bizarre pricing is the fact that the land that the building is built on is actually owned by a nearby church through a ground lease. A commenter claiming to be an ex-resident wrote "It is a Land Lease and the owners of those apartments are being severely raped by the church that continues to escalate the land charges to the bldg who in turn have to pass them on to the owners."

    343 East 74th Street unit 17CD [Corcoran]

    http://ny.curbed.com/archives/2010/1...es_a_catch.php

  5. #5

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    ^
    My sister USED to live in there.

  6. #6
    Crabby airline hostess - stache's Avatar
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    One more reason not to be Christian.

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