NEW YORK, NY – September 6, 2017
By Josh Lipton and Andrew Levine, ONE Commercial Realty Services
New York City’s most fashionable neighborhood, the Meatpacking District, where hip restaurants, exclusive clubs, and boutiques dot the cobblestone streets, is coming to Upper Manhattan. Call it the Mini-Meatpacking District and, while still in its first few innings, all the ingredients are there for a grand slam in Harlem’s Manhattanville neighborhood. Located just west of Broadway and running from 125th to 135th Streets, a submarket worthy of its own name is emerging. Like the Meatpacking District, this pocket of West Harlem is quickly becoming home to more and more college students and young professionals seeking swish boutiques, trendy restaurants and rooftop escapades much like their downtown counterparts. To spur commercial and residential developers, the City has offered tax exemptions to encourage the area’s transformation. The cobblestoned streets and industrial buildings are already in place; let the conversion of existing structures begin!
The transformation of this area is undoubtedly being driven by the Columbia University Expansion Project. Started in 2009, the 17-acre site, which sits on four large blocks from West 129th to 133rd Streets between Broadway and Twelfth Avenue, will feature approximately seven (7) million square feet of state-of-the-art teaching and research facilities, as well as parking, support services and community-oriented retail space, including bars, restaurants and live music. When completed, the Expansion Project is expected to generate more than 6,000 jobs and bring more than $11 billion in economic activity to the area.
Phase 1 of Columbia’s new facilities is well underway with the near completion of the Jerome L. Greene Science Center and the Lenfest Center for the Arts, together comprising more than 500,000 square feet of new construction. Immediately adjacent to the elevated 1 subway line, the Hudson River, and hip industrial warehouses, the Mini-Meatpacking District and the surrounding areas can expect the arrival of young well-heeled socialites to the scene, who will be demanding venues to match their voracious appetites. With purchasing power bolstered by parentally-backed bank accounts, landlords will be eager to take advantage of the influx of new capital. Whether Harlem’s Mini-Meatpacking District will ultimately experience the same level of nightlife with uber chic clientele remains to be seen, but, by all accounts, things look promising.
Economic opportunists have taken note and the early pioneers have already set up shop along the Twelfth Avenue retail corridor. This unique, emerging retail strip includes 10 blocks of cobblestone streets starting at the delicious Dinosaur Bar-B-Que, voted America’s best BBQ joint in ABC’s “Good Morning America” poll, on 125th Street and stops at the elongated “cake-like” two-story retail structure on 135th Street which was recently purchased in December 2015 by a large landlord active in Upper Manhattan. Plans are in the works to turn this space into an entertainment hub with drinking, dancing and dining. Other venues populating the commercial corridor include Bierstrasse Harlem Beer Garden, a heralded hidden gem of the area, Solomon and Kuff, a cool venue for cocktails and brunch, and others where millennials and curious onlookers can party into the wee hours of the morning. Several former industrial buildings, including the often-filmed 2335 Twelfth Avenue, are likely to be converted into hip retail venues in the coming years. Anchoring the area is Fairway Market which opened its doors back in 1995. This Fairway location is the company’s largest, comprising 10,000 square feet of enclosed space with a “cold room” where patrons can don a silver coat to keep warm while browsing their favorite selections of frozen foods.
The second iteration of the Meatpacking District only works if the surrounding area benefits from residential-friendly amenities, and Upper Manhattan’s Mini-Meatpacking District doesn’t disappoint. The two-acre West Harlem Piers Park opened in 2009, sitting on a former parking lot just west of the Twelfth Avenue retail corridor. Connecting West Harlem to the Hudson River, the park provides views of the New Jersey shoreline and the George Washington Bridge, and features a fishing pier, boat dock, kayak launch, as well as bicycle and pedestrian paths. The area is also home to Riverbank State Park, a 28-acre multi-level landscaped recreational facility including a variety of pools, rinks and courts for almost every sport.
Just east of Columbia’s Expansion Project, Janus Property, arguably the largest private non-institutional owner in West Harlem, is developing three acres of land into a world-class 24-hour mixed-use community of more than 1 million square feet tied together through a string of mid-block landscaped passageways and courtyards. Phases I and II are complete (the Mink and Sweets Buildings) while Phases III (Taystee Building) and IV (Malt House) are currently being developed. Though not Fifth Avenue, the 125th Street commercial corridor is undergoing a retail revolution. Already present along 125th Street are national tenants such as The Gap, Red Lobster, Banana Republic, Duane Reade, Designer Shoe Warehouse and Joe’s Crab Shack. Prominent retailer Jeff Sutton recently completed the development of Whole Foods and The Burlington Coat Factory, which, among others, are due to open their doors in the summer of 2017.
Investors are gobbling up real estate assets in the Mini-Meatpacking District at record-breaking levels, with retail and residential growth rates the envy of all Upper Manhattan owners. Retail rents along Broadway in the 130s up to the 140s are exceeding $100 per square foot at several locations and the trend is continuing. Not so long ago, $35-$50 per square foot was the norm. During the same period, residential rents rarely exceeded $35 per square foot but are now more than $50 per square foot with university students and young professionals arriving en masse and driving prices still higher. Land sale prices have increased dramatically as well with $200 per buildable square foot quickly becoming the floor. Savannah purchased 3080-3094 Broadway for $308 per buildable square foot in February of 2016, reaffirming expectations that the Upper Manhattan market will benefit from Columbia University’s Expansion Project. . Condominium sellout values are no exception. In Harlem just three years ago, $450 per square foot was the average sellout value and today’s values are in excess of $1,300 per square foot for newly-renovated, full service buildings in prime locations. Joe Sitt’s Thor Equities is betting big on the district as well, closing on a record breaking $34.4 million purchase of three contiguous mixed-use walk-up buildings at 556-566 West 126th Street—the equivalent of $664 per square foot or $562,934 per unit. These investments will undoubtedly benefit from the integration of the West Harlem community and the University. Once completed, the campus will be woven into the existing street grid without walls or gates. All of the buildings are inviting and open to the public at street level. Development of the first phase is continuing ferociously, as the 56,000 square foot University Forum and Academic Conference Center are set to open in 2018. Two buildings totaling 492,000 square feet, which will serve as the new home for the Columbia Business School, are scheduled to open in 2021.
The emergence of this new Mini-Meatpacking District has only just begun but as the demographics of Manhattanville continue to change, the retail and residential assets will evolve to match the preferences of these new residents.
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