New construction making a comeback in '96.

We may still be a long way from the real estate hey-day of the mid-80's, but the development community isn't complaining. The residential real estate market's recovery over the past two years has been remarkable and the way it looks, "The sky's the limit."

As luxury rental demand continues to outstrip supply, 1996 may turn out to be one of the development community's busiest years since the real estate industry downturn. Prompted by a 30 percent increase in cooperative apartment sales from a year ago, the rental market has tightened significantly and a healthy recovery is in sight.

Still, developers will build cautiously. Alarmed by the overbuilding of the commercial sector and the limited financing currently available, developers will move forward to meet the demand, but with a keen eye on the overall economic picture and their own bottom line.

New construction of luxury rental apartments has already begun (and in some cases been completed) in many of Manhattan's neighborhoods. The West Village, which has been a "hot" spot for new development over the past several years, will premiere 100 Jane Street, the area's newest luxury rental building, this Spring. Developed by Rockrose Development Corp., 100 Jane Street is comprised of 148 apartments, of which 20 percent have been designated for low- and moderate-income tenants. In addition, Rockrose, which has developed approximately 1,300 rentals in six projects within a 10-block radius of 100 Jane Street, will break ground on the West Village's latest luxury rental project, 100 Horatio Street, later this year.

Further testimony to the strength of the residential rental market is the success of Rockrose's Plaza East, Midtown East's only new rental building. Located at 340 East 34th Street, Plaza East was introduced to the market in March of '95 and 100 percent leased by September '95.

Other developers have set their sites on Downtown Manhattan and the opportunities that exist in conversion of obsolete office buildings from commercial to residential use, as well as the reformatting of office buildings for high-tech uses. As of yet, this market is still largely untapped. As the year progresses, a better picture will be painted of what's ahead for Downtown Manhattan.

To meet market demand in 1996, developers will have to do much more than just produce a quality product. A building must be "smart" - on the cutting-edge of technological developments, changes in the market, and the regulatory climate, such as OSHA's indoor air quality regulations, CFC-free refrigerant, and local fire and life-safety codes. High-tech amenities and environmental conveniences have never been more important.

Environmental concerns will be near the top of every developers list this year. City, State and Federal law will soon mandate that each property be equipped with a recycling system that separates materials on-site. These systems save enough in maintenance costs and garbage hauling fees to pay for itself, while giving mid- and high-rise tenants a sanitary and convenient way to participate in keeping the environment clean. Additionally, with these systems in place, operating costs are reduced by eliminating staff persons collecting recyclables, and by collecting separated recyclables, building operating costs are reduced and the environment directly benefits.

Rockrose Development Corp. has contracted to install a High-Rise Recycling System i.e., a carousel compactor, at 100 Jane Street, and plans to update systems across the company's portfolio.

Developers must also consider the technological needs of their prospective tenants. The evolution of the work/live apartment will make technological amenities a necessity in the apartment of the future. Everything from in-apartment closed circuit touch-screen video security systems to fiber optic capability to satellite dish hook-up options will be standard for apartments in the 21st century. The ability to access information from the Global Information Network to your apartment will allow business to be conducted at home and will be a key factor in apartment selection in years to come.

The recovery of the residential market will continue as the economy improves and more people forego the suburbs in favor of the city. This is good news not only for the real estate community, but for the entire city, as the full recovery of the residential market will have a positive ripple effect on all sectors of the New York economy.