For years, the promise of a Second Avenue subway line has tantalized residential developers who have been hungrily eying the stretch of the Upper East Side between Third Avenue and the East River.
With the first phase of the new line — which will run between 63rd and 96th streets — set to open in late 2016, a wave of new condos are being constructed.
In all, there are close to 900 condo units being developed across 19 projects on the Upper East Side between 59th and 96th streets, according to Halstead Property Development Marketing.
Some of the developments are the result of large and complicated assemblages; others are large-scale conversions of the neighborhood’s ample rental stock.
“There’s going to be tremendous growth in this neighborhood over the next 10 years,” said developer Ben Shaoul, whose firm Magnum Real Estate is converting 389 East 89th Street into condos.
Barbara van Beuren, managing director of development firm Anbau, said that when her company was evaluating development sites two years ago, it saw a void in the Manhattan condo market for units priced under $3,000 per square foot.
“Other people were overlooking the neighborhood,” said van Beuren, whose firm is developing a condo on East 89th Street. “Now it’s obviously a different story.”
Shaoul said the area’s high-density zoning is a big draw for developers. In addition, he noted that low retail rents — $300 to $400 per square foot in some locations — is driving development.
“Retail has been low because the area wasn’t developed,” he said, noting that the additional transportation is the spark developers needed.
On top of that, buyers have always been enticed by the throwback feel of the neighborhood.
“This is a real Manhattan neighborhood that hasn’t been infiltrated by commercial tenants yet,” Shaoul said. “There’s still a grocer, a butcher. There’s a Starbucks, of course, but [the neighborhood] is still very mom-and-pop.”
Families, in particular, have long been drawn to the Upper East Side because of its high concentration of private schools like Dalton, Spence, and Chapin, as well as popular public schools such as P.S. 6, P.S. 290 and P.S. 158.
Some of the big projects in the works in the neighborhood include 205 East 92nd Street, 360 East 89th Street, 1562 Second Avenue, 1059 Third Avenue, 180 East 88th, 389 East 89th Street and 20 East End Avenue.
180 East 88th
Rising 521 feet, developer Joseph A. McMillan, Jr.’s luxury condo tower at 180 East 88th Street will be the tallest building north of 72nd Street when it’s completed in 2018.
McMillan’s Tribeca-based DDG bought the site from Muss Development in 2013, paying $68 million, or $538 per buildable square foot, making it one of the riskier deals in the condo development world at the time. In 2015, the developer demolished three low-rise walkups at the site, located on 88th Street between Third Avenue and Lexington Avenue, paving the way for the residential tower. Over the summer, the developer broke ground on the project, which will feature 30-foot-high masonry arches and a brick façade imported from Denmark.
In November, DDG received the green light from the AG’s office to begin selling apartments. It’s aiming for a total sellout of $308 million, including its storage units.