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Real Estate


Raw space is out; warm, bright homes are in; and the flower district is blossoming. But if you think you'll catch a recession special downtown, you've already been outbid.


Lofty ambitions: The smoke has cleared from the Broadway loft that Dina Zavalia bought for $1.5 million in September.

"My living room is 60 feet by 40 feet. Once I get in there, I can't wait to put on my Rollerblades," says a delighted Paul Gregrey of the 3,000-square-foot North Chelsea loft he bought this fall for $1.1 million. A 42-year-old sales exec for Westwood One, he's a far cry from the pioneering artists who turned loft living into a fantasy lifestyle two decades ago, but now he's living that dream -- and it took a disaster to get him there. "A lot of young people made an awful lot of money in the late nineties and spent freely on housing," says Judith Thorn of Ashforth Warburg. "They found the glamour of lofts appealing." But as the recession settled in last year, "anything over $2 million suffered," Tricia Hayes Cole of Corcoran says. "Everyone was scaling back. They didn't need the luxury of a huge loft -- it was about practicality instead of extravagance." And then came September 11.

The Numbers  
TriBeCa $600-$750 per sq. ft.
West Village $650-$800
SoHo $650-$800
Flatiron $650-$800
Chelsea $600-$700
North Chelsea $400-$550
East Village/Lower East Side $400-$500
Williamsburg $400-$500
South Brooklyn $425-$600

Temporary setback: When the downtown market seized up in the wake of the attack, a handful of loft shoppers -- like Gregrey -- dived in and came up with pearls. But those deals are disappearing fast. Prices are rising for lofts everywhere, even within breathing distance of ground zero. The rewards went to those who moved fast, like clothing designer Dina Zavalia. A week after the September attacks, Zavalia and her husband stumbled upon their dream home after two years of touring crummy, dark spaces. William B. May's Margery Hadar showed them the 3,000-square-foot loft in TriBeCa while it was still smoky from the disaster. "I felt asthmatic," Zavalia says. "Every time I would see it, I would get a migraine that night. But it was so pretty!" She snagged the apartment for $1.5 million ($508 per square foot).

The price is right: North Chelsea (the flower district, newly renamed Chelsea Heights) has for decades been the place for wholesale foliage; now it's becoming a place to put down roots. "Some people think I'm crazy moving into this neighborhood because they don't see what it's going to be in three years," Gregrey says. Gourmet groceries and pharmacies and laundromats are popping up between old factories -- it's like SoHo in 1979, or the Flatiron district in 1989. "This area represents the value that NoHo did ten years ago, when SoHo was trendy," William B. May's Edward Ferris says. Average prices in the area are as low as you can go in the Manhattan loft market: $400 to $550 per square foot, compared with TriBeCa's $600 to $750. But there are trade-offs -- notably, a shortage of good public schools. "TriBeCa's had more young people coming in, more families, more children's clothing stores, more nursery schools," says Susan Penzner of Susan Penzner Real Estate. Kids in the flower district attend the less desirable P.S. 33, which scores below the state average on standardized tests. The area also has more traffic than TriBeCa and SoHo, and lacks landmark-district status.

Farther afield: Next up in the development pipeline is North Brooklyn. Amid the artists and musicians renting in the industrial sprawl, condos are sprouting. Williamsburg Mews was the first of two developments on the market (with three more to come), and is selling out loftlike apartments at $400 per square foot. "Brokers thought people would only move here to rent," says Helene Luchnick of Insignia Douglas Elliman, which represents the development. "We're proving them wrong." Ditto for dumbo's fledgling sales market, where the success of David Walentas's Clock Tower lofts have inspired plans for copycat condos.

It's a mall world after all: SoHo may have originated the loft trend, but in the minds of many buyers, its glory days are over. "On weekends, it's mobbed -- it's like an outdoor mall," complains Noel Kirnon, who scoured downtown for three years before he found a penthouse on Duane Park in November. The West Village matches TriBeCa's quieter, neighborhood feel, but it has fewer old-style conversions. New developments -- usually luxury buildings -- are more expensive: The Village's new Richard Meier -- designed glass towers sold nearly all of their loftlike raw space for $1,000 to $1,800 per square foot. And that was before the building went up.

Think outside the white box: Meier's towers notwithstanding, buyers have been much less willing to renovate than they were in 2000, when finding a contractor was like getting a seat on the 6 train at rush hour. "The tide has turned from the last two years, when developers would get equal prices for unfinished space," Luchnick says. "People don't want to deal with that anymore."— MONICA KHEMSUROV


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