Emerging markets like Northern Manhattan are offering real estate investors “huge potential for growth,” though such growth is dependent on continued investments in transportation and infrastructure, market players said at a Midtown panel discussion Thursday.
Developers and investors are increasingly looking to emerging neighborhoods thanks to “trends occurring that have led us to look beyond our core markets,” RXR Realty exec Seth Pinsky said at Bisnow’s “NYC’s Emerging Markets” panel.
“The core markets of the city are attracting so many people that it can’t keep up with demand,” Pinsky noted, with more commercial and residential tenants “looking for walkable, transit-oriented” neighborhoods in Northern Manhattan and the outer boroughs.
“People and businesses want to be in these places,” Pinsky added, stressing the “need to continue to invest in quality of life and infrastructure” projects to facilitate further development in such emerging markets.
Northern Manhattan was the primary focus of the morning’s discussion, with Cushman & Wakefield’s Robert Shapiro lauding Harlem’s prospects for future development.
“Fundamentally, [Harlem] has some of the best transportation in the city,” Shapiro said, with that infrastructure fostering “high value” residential developments that aimed at attracting tenants “who can afford $45 [per square foot].”
“Today we’re asking $300 a buildable square foot uptown, and we’re getting in the $200s,” Shapiro added. “It’s happening.”
While HAP Investment Developers CEO Eran Polack was less bullish, describing Shapiro’s evaluation of the Northern Manhattan market as “too expensive,” Ariel Property Advisors’ Victor Sozio agreed, noting “the fundamentals are there” for growth in Harlem.
“Development values are still not too expensive,” Sozio said. “Harlem has the infrastructure that will continue to be conducive to this growth.
Janus Property Company principal Scott Metzner noted how his company first ventured into the Harlem market “literally 30 years ago,” and how the market has transformed from one “where nobody wanted to buy” a $10,000 brownstone to one where “people are coming to Harlem to try to make money.”
Shapiro described Janus’ $135 million mixed-use redevelopment of the former Taystee Bakery as “one of the most exciting projects” in the neighborhood.
“If you haven’t walked around this area and you’re a real estate bloodhound, it smells like it’s going to be the [next] Meatpacking District,” Shapiro said.