Real Estate 2001: Neighborhood Profile

What happened to SoHo? “The Guggenheim became Prada,” says Corcoran broker Judi Harvest. “I mean, what else can you say?” Of course, the Guggenheim itself arrived long after the original wave of illegal homesteaders in the seventies who were looking for space to make large-format art. Their greatest legacy was probably the invention of the Loft—a whole new mode of living in which dangling sprinklers, brushed concrete, and exposed plywood seams became chic. Today, the neighborhood is so overrun with high-end retail where galleries and arts groups once thrived that it’s a bit like living inside the Short Hills Mall—only everybody’s speaking French or Japanese.

TIPPING POINT: “The big retail boom brought a new cachet to SoHo, which is what caused residential prices to surge,” says William B. May’s Edward C. Ferris. But in terms of apartment life, things moved very quickly from the eerie streetscape of After Hours to the bustling mini-mall it’s become.

MIGRATIONS: SoHo day-trippers once hoped to spot scruffy artists on their way home from Pearl Paint. Now the neighborhood has given way to Range Rovers, investment bankers, and moguls like Rupert Murdoch, who’s living out his late-midlife-crisis in a penthouse on Prince Street. The city has an artists-in-residence restriction still in effect to preserve SoHo as an artistic neighborhood, “but no one enforces it,” says Ferris. “If they did, at least 50 percent of the new residents would have to be kicked out.” (Claire Danes and Matt Damon needn’t worry.)

WHAT’S NEW: The New Museum Buildings at 158 Mercer Street and 30 Crosby Street have been converted into condos. Unlike earlier conversions, these aren’t raw spaces but ready-to-inhabit homes with amenities like stainless-steel kitchens, wine cellars, and concierges. “This is a faster time,” says Harvest. “Nobody wants to buy a place for $2 million, then have to pay a designer another $2 million, and then wait two years to move in.” Not long ago, 30 Crosby Street, between Broome and Grand Streets, was considered marginal. “No one would have spent that kind of money”—$2 to $7 million—”to live on Crosby and Grand a few years back,” says Stribling broker Steven Hauser. “Now Lenny Kravitz lives there.”

STREET LIFE: “Some people who bought places five or ten years ago are now complaining,” says Hauser. “They say the streets are so crowded with weekend shoppers that they can’t even walk outside.” Which is why many people with a loft jones have begun choosing TriBeCa. “The only reason to have a loft in SoHo is if you have a country house,” says broker Susan Penzner. “No one who lives in SoHo is there on the weekends.”

PROGNOSIS: Assuming the city doesn’t lose its voracious appetite for luxury retail and overdesigned restaurants, expect it to become even more crowded. On the other hand, brokers recall that a less-established SoHo lost more value than most areas in the last recession.

Real Estate 2001: Neighborhood Profile