Real Estate 2001: Neighborhood Profiles

Once dismissed as a postcollege dormitory for frat types bunking up to save a buck, the Upper East Side, east of Lexington Avenue, has morphed into a neighborhood of nesting professionals. “Once people had the money for more space, they either moved closer to the Park or to the suburbs,” says Citi Habitats vice-president Gordon Golub. “Larger apartments were vacant for many weeks—often months—at a time.” But once crime rates dropped and the New Economy hit, landlords recognized a demand for more space and began combining smaller apartments into larger ones and rapidly converting rentals into condos. At the same time, the neighborhood’s less-than-chic reputation has kept rental prices in check, making it a relative bargain given the number of restaurants and high-end boutiques that line its avenues—and the East River parks that line its shore.

MIGRATIONS: The well-to-do are no longer reluctant to settle down east of Third Avenue. And the sidewalks are choked with strollers. The new Mimi Maternity, on Third Avenue between 60th and 61st Streets, “is now one of our top-selling stores in the country,” says MM honcho Rebecca Matthias.

CREATURE COMFORTS: Five years ago, two properties at 84th Street and First Avenue sat on the market for two-and-a-half years before being leased to a bar and a real-estate office. Today, the storefronts along the eastern avenues are full of businesses catering to families and established professionals. Madison Avenue–quality stores and restaurants, like Scoop and Atlantic Grill, are scattered about, and almost every neighborhood has a gourmet grocer, from the Vinegar Factory at 91st Street and First to Citarella at 75th Street and Third Avenue.

TIPPING POINT: The completion of the bridge market under the 59th Street Bridge in 1999 marked the push east of Second Avenue. The emergence of Guastavino’s, Conran’s, and an enormous Food Emporium—plus a new Bed Bath & Beyond one block north—anchored the residential market along First Avenue in the low Sixties. What followed was a space race, retail as well as residential, along First Avenue up into the Seventies—a former “wasteland,” recalls Golub.

WHAT’S NEW: At 210 East 68th Street, one- and two-bedroom prewar units were combined into family-size apartments, including a 3,500 square-foot penthouse with a 2,500 square-foot terrace, which was recently leased for $20,000 per month. One hundred eighty units in a just-completed building at 77th Street and First Avenue were built as rentals, but the developer saw how quickly buyers were snatching up condos in the neighborhood, and opted instead to sell them (two-bedrooms start at $775,000). In the East Nineties, three major high-rises have been erected in the past year alone.

PROGNOSIS: “Right now, the Upper East Side, east of Lexington Avenue, is the most reasonable neighborhood in New York for rentals, except, perhaps, for Wall Street,” says Golub. “If the market were to remain as hot as it’s been, York would be the logical next step, in terms of development,” he says. “But the market has already come down about 10 percent since its peak six months ago, and, some may argue, it will fall another 10 percent in the coming year.”







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Real Estate 2001: Neighborhood Profiles