New York City Development Sites In Ridiculously High Demand

30/04/2013 11:02 am

According to Crain's property prices in Manhattan are reaching record highs as developers make crazy bids for development sites. There is a rush that is pushing prices for property - either vacant sites or buildings that can be knocked down - to record levels.

Examples include:

  • In early April, Peter Hauspurg had a buyer geared up to make what looked certain to be the blowout winning bid of $45M for a West 77th Street development site. Not only was his client outbid, but so too were 16 others who offered even higher sums. Crains suggest that the winning bid, which has not yet been announced, will end up being as much as 50% over the original price.
  • A long-stalled site on East 125th Street fetched $65 million, $22 million more than it was sold for at the peak of the market in 2007.
  •  A former Getty gas station on the corner of 10th Avenue and West 24th Street that abuts the High Line is widely expected to change hands for more than $20 million, a figure that equates to about $700 or more per square foot for the 30,000 square feet that can be built on the site.

"There is a scarcity of good development land in Manhattan," said Mr. Hauspurg, chief executive of real estate brokerage Eastern Consolidated. "Pricing has almost now doubled from the peak of 2007."

For a prime site, developers are now commonly paying as much as $700 to $800 for every potential square foot of building that zoning rules allow them to construct. Those prices tower over the heights reached in the frothy market of six years ago, when even the most prized parcels rarely traded for more than in the $400s per buildable square foot. [Crain's, Daniel Geiger]