The other night we found ourselves at a panel conversation titled, “The Transformation of the Lower East Side.” Right up our alley! But for once, as luck would have it, we weren’t stuck in a musty smelling community center with harsh florescent lighting. We were hanging out in unit #12B of the Blue Building, where there was wine and cheese and a very creative sales pitch.
The Blue Building is, of course, a trailblazer when it comes to luxe living on the Lower East Side. The 16-story tower at 105 Norfolk St. was lauded by architecture critics and loathed by many locals when it opened in 2007. Is it a design masterpiece or a giant symbol of gentrification, or both?
The 3-bedroom, 3 bath unit with more than 2,100 sq. ft. of living space and spectacular views in almost every direction went on the market at the beginning of the summer for $3,895,000. That’s almost $1 million more than its sale price just two years ago. Since that time, however, the Lower East Side real estate market has gone bonkers. Right across the street, at 100 Norfolk St. (where a fancy new cantilevered tower is under construction), a 3 bed/3.5 bath penthouse unit is listed for nearly $4.9 million.
The panel discussion was a production of Douglas Elliman Superbroker Jacky Teplitzky ($1 billion in home sales since 2000). She was joined in the sun-drenched living room by Eric Ferrara of the Lower East Side History Project, developer David Amirian and New York Post reporter Zachary Kussin, who served as moderator. There may have been some prospective buyers in the room, but there were also curious real estate industry types, including Co-op Village specialist Jacob Goldman of LoHo Realty (he once took a real estate class from Teplitzky).
Amirian (he developed The Robyn rental building on East 3rd Street) was asked for his assessment of the Lower East Side’s real estate market. He answered that Millenials, who are driving New York City jobs growth, are gravitating to the neighborhood because it has “the easiest barrier of entry.” Translation: A million bucks doesn’t go as far as it once did and they’re getting priced out of other areas, making the neighborhood one of the only places they can actually afford.
As guests gazed out at the formerly middle income Grand Street Co-ops and public housing in the distance, he mentioned the new hotel projects (The Ludlow, Hotel Indigo, etc.) that are transforming the LES. But his main focus was on the neighborhood’s fledgling condo market. All eyes are on several new projects, including 100 Norfolk and another high profile development at 50 Clinton St. The real estate industry, he said is watching to see how sales go in those buildings. The early signs are giving them hope (some apartments have been snapped up for $2,000 sq. ft., breaking a new LES barrier). Amirian predicted there will be more new condo construction, as well as conversions of rental apartments in the years ahead. This could make the neighborhood a go-to spot in a category absurdly dubbed “affordable luxury” (apartments priced between $1-3 million).
One condo project he talked about is a stalled development on Pitt Street from a group of Chinese-American investors. Every developer in town has looked at the site, which was listed for more than $35 million, but the price is too steep for the far-East location, Amirian added. “It’s an unknown,” he explained. “You’d be a pioneer in that area,” theorizing that the project is probably most realistic as a rental.
Teplitzky said she’s enthusiastic about the Lower East Side because the condo market is just now developing. Her clients, many of whom tend to hold on to apartments for only about five years, are looking for investment value. “There will be appreciation here,” she asserted. “Soho and Tribeca people are ready to cash out. They want to start over. Soho is like a mob scene now. The Lower East Side (even though it has a lot of nightlife) is quieter.”
Eric Ferrara, the Lower East Side history expert, was asked how locals feel about neighborhood change. He said the issue of gentrification is always polarizing and many people lament the changing character of the community. But at the same time, Ferrara said, “Change is what the Lower East Side has always been about.”
The invitation for the panel discussion featured a rendering of the Essex Crossing project, which is now under construction directly across from the Blue Building. One member of Teplitzky’s team said it seems as though people across the city aren’t all that aware of Essex Crossing, which will bring 1,000 new apartments and a host of amenities to the area. They’re obviously hoping more awareness will serve as a selling point for their listing in an eight year-old building that’s no longer the Lower East Side’s shiny new showpiece.