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Sixth Avenue development moves toward Herald Square.

Byline: Gabby Warshawer

By this summer, the first residents of the long-awaited Chelsea Stratus will have moved into their condos in the neighborhood's tallest building.

At 40 stories, the building's height has been its key selling point. In a few years, however, there will be more castles joining the Stratus in the sky along the heavily developed Sixth Avenue corridor between 23rd Street and Herald Square.

One of the new towers in the pipeline for Sixth Avenue is 885 Sixth Avenue, which is tentatively being called Tower 111. The 47-story glass tower at 32nd Street will have 47,600 square feet of retail space, including a wide base for multi-level shopping. The ground floor, mezzanine, second and third floors of the Costas Kondylis-designed high-rise will house stores, while the upper levels will be residential -- a design akin to that of the wildly successful Time Warner Center.

The developer, Atlantic Realty Development, started consulting retail brokers when planning for the building commenced.

Benjamin Fox, the president of the Winick Realty Group, is leading the leasing efforts for the project, and the firm expects it to draw national and international companies. The building will rise across the street from the Manhattan Mall and right near Macy's.

Only a block away, Winick is also handling leasing for another tower that's in the works, 855 Sixth Avenue. Tessler Developments and the Chetrit Group are building a 30-story building that should be complete within the next couple of years.

"The area is a continuation of Herald Square," said Jeff Winick, CEO of the company that bears his name. "J.C. Penney, for example, is coming to 32nd Street and Sixth."

Winick said 855 Sixth, which is between 30th and 31st streets, will have anywhere from 120,000 to 200,000 square feet of retail space and two or three parking levels.

Like 885 Sixth, the building is being designed by Costas Kondylis, and it too will have a wide base for stores topped with residential floors.

"The area is a true melting pot of residential and retail," said Winick. "It's an obvious location to have big retail."

And yet, developers are counting on the fact that plenty of people will want to call the stretch home. In this respect, the Chelsea Stratus, which is on Sixth Avenue between 24th and 25th streets, is a success story.

"We're looking to have occupancy by the end of May or beginning of June," said Chris Saliearno, Prudential Douglas Elliman's on-site sales coordinator at the Stratus.

Saliearno said that as of mid-March, 85 percent of the condo's 240 units were sold. Prices in the building started at around $750,000 and topped out above $4 million, with most in the $1 to $2 million range.

"The ones on higher floors sold first," said Saliearno, who noted that the development attracted a wide range of buyers, including many first-time purchasers.

Until recently, new high-rise development on Sixth Avenue between 23rd and 34th had been primarily rental. Between 2000 and 2006, five rental buildings were constructed on the stretch, including the 407-unit Chelsea Landmark and the 266-unit Archstone Chelsea.

Now, aside from the nearly complete Stratus and the developments at 855 and 885 Sixth, two other high-rise residential buildings are also on the drawing board: Adellco's the Remy, on 28th Street -- which has been planned for a couple of years, though construction has yet to begin -- and J.D. Carlisle Development's 46-story condo-hotel between 29th and 30th streets.

There are also other hotels currently in some phase of construction nearby, including the Hotel Indigo at 127 West 28th Street, and 128 West 29th Street, which developer Sam Chang is turning into a Doubletree.

As the Stratus bears out, sales in the area are generally healthy, according to brokers.

"The studios, ones and twos are doing great," said Richard Hamilton, a senior vice president with Halstead Property. "There seems to be slowness in some of the loft-type buildings with full-floor units. The $2 to $4 million range is where we're seeing some resistance. The Stratus and the Onyx [at 261 West 28th Street] have both done well."

Hamilton noted that the entire swath of the avenue is changing in character, especially in terms of its retail makeup.

"You still see some of the storefront wholesalers, but they're on their way out," he said. "In 10 years, it'll look like a canyon filled with tall condos and rentals."
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Author:Warshawer, Gabby
Publication:The Real Deal
Geographic Code:1USA
Date:Mar 31, 2008
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