North Harlem corridor is now coming full circle.

For years, Manhattan real estate investors and condominium converters steered clear of sites above 96th Street for fear of crime, drug activity and substandard upkeep. Over the last five years, however, the resurgence of Harlem's real estate has pushed the imaginary line of interest further north.

The 125th Street corridor is splashing news publications with its revival. Projects such as "Harlem Park," a 34-story, 550,000 s/f, $220 million project on 125th and Park Avenue will tower over a key Metro-North commuter-rail station one stop from Grand Central Station. It will feature 185,000 s/f of Class A office space, 57,000 s/f of retail space and a conference center for 800, all at its base. Its tower will house 80,000 s/f of luxury residential units, with 14 floors dedicated to a 204-room Marriott Courtyard Hotel. Rumors of the flagship Nike brand "Jordan" apparel store at the base of the site has the city buzzing.

Moving east, the Harlem Auto Mall is set to be the largest auto sales and service center in New York City. Comprised of an area just under the size of a city block, the mall is located at 127th and 128th Streets, between Second and Third Avenues. The development will include four General Motors franchises selling Chevrolet, Saturn, Cadillac and Hummer vehicles. The project is estimated to bring more than 200 new jobs to Harlem.

125th Street's much publicized resurgence in nationwide publications has also increased larger developers, condo converters and first time homeowners to venture north. The corridor has exploded with huge transactions, development, high expectations and record prices per square foot. Projects such as Harlem Hospital's five-year, $226 million modernization and expansion will enable the improvement of its physical and therapeutic environment, and offer more state-of-the-art services to Harlem and its surrounding neighborhoods. Already distinguished as one of the top emergency trauma centers in the United States, its growth has had a direct correlation with prices fluctuating in central Harlem's once "left for dead" townhouse market.

As doctors, nurses, and hospital employees established themselves, they sought living quarters closer to work. All avenues pointed to Harlem's Strivers Row. An integral part of New York's African American history, this location was where the strivers or people with ambitions have always lived. The two rows of 1890s brownstones on 138th and 139th Streets in Harlem were originally built for middle-class black families, attracting wealthy and influential African Americans by the 1920s.

Block associations have always flourished on these historic blocks, but their influence and pride of Strivers expanded to the surrounding blocks. Unlike other Manhattan blocks, every house on Strivers Row has legal private parking. In some cases, as many as four parking spaces are inclusive with the homes in between Adam Clayton Powell and Frederick Douglass Blvds., and/or from the two entrances on each street originally designed for horse drawn carriages to access the parking. These facts, along with the historically significant facades and well-maintained tree lined blocks, have encouraged prices to skyrocket. A home recently sold on Strivers Row for $2.6 million, and several others are active on the market at prices topping $2 million. The blocks directly north and south of Strivers have reaped the same benefits of sharing the private parking with their homes, with prices topping $350 to $400 per s/f.

Shifting focus to investment, the 135th Street corridor has seen two of its largest properties put up for grabs. Riverton Apartments, a 1,232 unit east river waterfront residential community on 7.6 acres in 12 buildings, with an additional 139,000 s/f of air rights, was put under contract for more then $100,000 a unit, or $135 million. With active bidding for more then six months, both New York-based and out of state/country investors took notice of this massive piece. A Chicago investment group won the battle of the bids, with plans for conversion and development of the existing air rights. In addition, Delano Village, the massive 1,800 unit waterfront residential community directly north of

Riverton spanning from 139th to 142nd Streets was just put on the market. With more than 3,000 apartments and an estimated $300 million in transactions on the 135th corridor, it seems the Harlem resurgence has clearly migrated north of 125th Street. These deals, combined with the new-to-the-market Lenox Avenue blockfront of 144th to 145th Streets for $16.5 million ($300 per buildable foot), would translate to almost the entire East River waterfront spanning from 135th to 145th Streets changing hands in a year's time.

On the smaller scale, income-producing properties are being traded at and above 10x their gross rent multiple, with cap rates floating steady at 7% for properties with upside. Several investors are paying substantially higher numbers then once fathomed on the premise of renovations and conversion of stabilized and controlled units.

As 2006 approaches, many will reflect on 2005's record real estate year--the approval on the design of the new World Trade Center, the countless condo projects, restorations, and ground up developments all over Manhattan. And finally, the resurgence of the 135th and 145th Street corridor in Harlem.

ANDREW SALOMON

BROKER, CENFRAL HARLEM, MASSEY KNAKAL REALTY SERVICES