In Manhattan, we tend to th
ink about real estate the way George Orwell thought about communism: all neighborhoods are trendy; some neighborhoods are trendier than others. The Lower East Side is the kind of neighborhood kids from all over dream of one day moving to and becoming artists. Though its as full of high-end retail and upscale restaurants as any other part of the city, it retains a bohemian flair that makes it destination number one for the young, aspiring artist crowd. This can tell us something about real estate trends in the area. Developers say the demographics of the Lower East Side mean that new buildings are far more likely to be rentals than condos.
We wrote earlier about the thriving rental market in the downtown east neighborhood. The reason for this is the younger New Yorkers who are attracted to the Lower East Side aren't the kind of people who want to commit to buying property. The 20-something demographic overwhelmingly chooses rentals over condos, and for as long as the Lower East Side remains a cultural hotspot, apartments will be in high demand. Developers say that lending institutions are tepid about providing loans for condo construction in the area. However they have no problem loaning for the construction of rentals. Meanwhile, luxury apartments in the Lower East Side are a hot commodity, with landlords being able to wring out as much as $70 or $80 per square foot for a residence.
The newest development site in the Lower East Side went on sale yesterday on Houston and Suffolk Streets near Katz's Delicatessen. It provides 70,000 square feet of space that developers will turn into luxury Manhattan real estate. It’s unknown whether the space will be converted into apartments or condos, but given what they know about the neighborhood trends, developers suspect it will be the former. For as long as the Lower East Side is trendier than others, it’s a pretty safe bet what kind of real estate will be constructed.
