Creating Value Out of Air
In 2015, one of our long-time partners was looking to divest themselves of a portfolio of parking garages in Manhattan. One of them, 110 E 16th Street, happened to be located in one of New York’s most coveted, vibrant and undersupplied condo submarkets, Union Square. Offering a rare combination of character and commercial convenience, the area’s diverse amenities range from flagship retail and world-class restaurants to boutique stores and neighborhood eateries, not to mention the widely popular Greenmarket, featuring up to 140 regional farmers, seafood purveyors, and bakers in peak season.
As one of Manhattan’s busiest transit hubs, Union Square provides access to expeditious travel throughout the city and direct access to New Jersey and Brooklyn via 10 subway lines, over 10 bus lines, 15 Citi Bike stations, and the PATH. Adjacent to some of Manhattan’s most popular neighborhoods, it is also a short walk to Flatiron, Gramercy Park, Greenwich Village, and the East Village, to name a few.
From a fundamental perspective, the supply and demand dynamics in Union Square were attractive, as the new residential pipeline in the immediate area was extremely limited. In fact, at the time of underwriting, there were no residential developments within a five-block radius of the project. Businesses, particularly in tech, have been pouring into Union Square, drawn by the wealth of local amenities and transit options. Facebook, eBay, Netflix, Hulu, and Adobe have set up offices in the neighborhood; and Microsoft recently announced it would consolidate all its New York offices into one flagship space in Union Square. Consequently, new development has been heavily focused on office and retail, creating a great opportunity to deliver high end condo product.