$100M Manhattan Apartment Project in the Works
- Nov 22, 2011
New York—Manhattan renters are growing hungrier for accommodations, and Multi-Employer Property Trust is ready to help satiate their appetite. The open-end commingled real estate equity fund has revealed plans to shell out $100 million to develop a 165-unit mixed-use apartment tower at 309 Fifth Ave.
All the pieces of the 122,000-square-foot project appear to have fallen into place. Bentall Kennedy, MEPT’s exclusive real estate investment advisor, has tapped Urban Development Partners to serve as developer and brought in Lend Lease to take on the role of general contractor. In addition to high-end residential units, the 35-story high-rise will feature 10,400 square feet of ground- and basement-level retail space. Amenities for the building’s dwellers will include a fitness facility and a landscaped rooftop terrace. And the property’s location between E. 31st and 32nd Streets allows for easy access to a handful of subway stations, as well as Penn Station.
SLCE Architects is the designer behind 309 Fifth, which will qualify for LEED certification by the U.S. Green Building Council.
Manhattan’s apartment market is primed for new product. “Currently, there is a limited pipeline of new projects and over the past year there has been positive net absorption of the existing apartment inventory,” David Antonelli, executive vice president at Bentall Kennedy, notes in a prepared statement. “As a result, vacancy rates have been trending lower and strong effective rent growth is anticipated.”
Indeed, rents are going up and vacancies are coming down in Manhattan. In the third quarter, average rental rates increased 1.6 percent from the second quarter, reaching $3,521, as per a report by Prudential Douglas Elliman and Miller Samuel Inc. Additionally, the absorption rate for new units was 1.7 months, a drastic improvement from the 7.7 months one year ago.
Antonelli is confident that the positive conditions are not fleeting. “Demand for new apartments will remain strong for the foreseeable future due to demographic and economic trends, including the large population of echo boomers—19-34 year olds—entering the workforce who will likely be renters, and an overall decline in homeownership rates.”
Developers are practically coming out of the woodworks to erect upscale apartment towers in Manhattan. Projects that have recently gotten underway include Gotham Organization Inc.’s four-building complex in Midtown West. The $520 million mixed-use residential development will feature 1,200 rental units, 550 of which will be luxury apartments. And the lending community has definitely warmed up to the sector. Ross Associates just announced the closing of a $125 million loan on behalf of Friedland Properties for the construction of the 181-unit Larstrand on the Upper West Side.