There is much more than meets the eye to big city residential real estate trends in New York especially in midtown, where a symbiotic relationship with commercial development plays a major factor.
Capital reinvestment in midtown is keeping the city healthy, as iconic buildings are currently being modernized to maintain functionality. Many office buildings, like those in Rockefeller Center which were built in the 1930s, are undergoing major renovations to mirror the qualities found in new residential development.
Adapting buildings built in the 20th Century into the 21st Century means gutting interiors while preserving iconic landmarked façades. Improvements include the installation of HVAC systems, floor-to-ceiling windows, and 9-foot ceilings, the reduction in energy consumption and the creation of outdoor spaces.
Diversity of Product
Midtown draws investment to its diverse offerings and varied customer base. In the last 10 years, a third of the midtown inventory has traded hands. A third of that has traded multiple times in a decade. As a result, within a block there are staggering differences in rents.
Invisible from the outside, more than two million square feet of office space has been converted into residential space in midtown. Just as in downtown, more people want to live, work and play there. The conversion of commercial to residential space is proliferating to accommodate demand.
Industries like technology are literally growing up in New York. Office space in midtown remains convenient to commuters, while residential space in walking distance to work is increasingly desirable. At Pier 57, for example, you have recreation, outdoor space, and views up and down the west side, making it appealing to Google, which is taking 250,000 square feet of space there.
Bordering the mixed use Hudson Yards district, Relevance’s luxury rental client Sky at 605 W 42nd Street is the city’s largest residential tower. With 1,175 units, 20 percent of which are regulated as affordable housing, the landscape has changed, not only physically, but also culturally. Public works like the Kusama sculpture permanently installed in Sky’s motor court create a more appealing atmosphere in areas of formerly underutilized industrial property.
There is also much greater investment in midtown programming. Lunchtime outdoor Zumba and cycling classes take place on the plazas through the summer, as well as major art installations. All of this ensures sustained interest from younger generations.
The sense of curating an urban marketplace is important. Food halls and restaurants with outdoor seating create a campus feel. Attention to the experiences of those who work in in midtown enhances the overall community submarket.
Tech companies today look for out-of-office places for efficient lunches, walking meetings or coffee. The decline of the power lunch scene has led to the heightened popularity of boutique coffee shops and healthy bites. Features like workplace outdoor roof terraces are blurring the lines of business and pleasure.
Residential real estate’s influence upon commercial is seen in the creation of lounges in office buildings. Charging spaces on tables, test kitchens, and thoughtful lifestyle design is key, as is incorporating socially responsible volunteer opportunities. Buildings today, whether residential or commercial, focus on social missions to generate creative content and a sense of community.