Whereas the Second Avenue subway extension plans cloud the way forward for 125th Avenue east of Madison Avenue, as we lately reported, the central and western blocks of Harlem’s historic crosstown hall are altering quick — and normally for the higher.
New growth and funding in older properties are bringing new power and offering Harlemites extra buying, leisure and cultural choices.
Extra properties are in play than ordinary as homeowners eye massive buy affords. Retail rents are rising as nicely.
A stroll reveals a boulevard present process dramatic transformation — largely productive however sometimes at the price of small, longtime retailers.
An almost completed, 26-story Marriott resort looms above the long-vacant Victoria Theater web site between Adam Clayton Powell and Frederick Douglass boulevards. The Apollo Theater on the identical block will create and function a brand new performing arts middle on the challenge’s decrease flooring.
Work is underway to develop the Studio Museum in Harlem at 144 W. 125th St., the place demolition of part of the property has begun to make approach for a brand new, David Adjaye-designed extension.
A retail surge lately introduced Complete Meals, Victoria’s Secret, Tub & Physique Works and others to the Lenox Avenue nook and the block west.
Colliers Worldwide Govt Managing Director Eric Yarbro stated, “Our common evaluation is that Harlem is in a fantastic place proper now.”
He stated that for retail or workplace tenants, Harlem is “one of many final bastions of affordability within the 5 boroughs.”
However “affordability” is changing into extra relative. Insomnia Cookies simply opened at 17 W. 125th, a tiny Thor Equities property the place the asking lease was reportedly $150 per sq. foot.
In the meantime, Colliers is “actively working with two massive, international-name retailers 125th Avenue,” Yarbro stated.
“They produce other websites the place the lease is $1,000 a sq. foot. In Harlem, they may pay $160 a foot, and there’s large pedestrian visitors,” he stated.
Ariel Property Advisors Govt Vice President Michael Tortorici stated that between 5 and 10 years in the past, the neighborhood retail norm was round $100 per sq. foot. “Now it’s more and more frequent to see costs going north of $100,” he stated.
In one other reflection of rising confidence, Ariel is advertising the remaining 94 years on a 99-year leasehold at 4-14 W. 125th St., a four-story constructing with 100 ft of priceless sidewalk retail frontage.
The 35,000-square-foot constructing additionally comes with 10,000 sq. ft of unused air rights.
In accordance with the prospectus, the leasehold lease is $617,000 a yr and can rise over time underneath a specified system. The property “has the potential to generate annual earnings nicely in extra of $2 million,” the prospectus says.
Though it’s “not a road that trades typically,” Tortorici stated, Ariel brokered the $26.5 million sale final yr of 5 adjoining buildings at 54-62 W. 125th St. — a longtime vacant eyesore — to the Jay Group, which later secured a $37 million building mortgage to develop a good-looking new house and retail tower. Work is continuing quickly.
Yarbro stated, “From our perspective, purchasers are Harlem as a market that has sturdy upside potential should you’re investing and searching for returns.”
One indicator of energy is the sturdy leasing at Harlem Middle at Lenox and 125th, developed by Forest Metropolis Ratner in 2002 and now owned by Brookfield. Asking rents of $50 per sq. foot might be successfully lowered to about $35 underneath town’s Relocation and Employment Help Program (REAP), which supplies tax credit for firms shifting to “goal” areas.
On the property sale entrance, Yarbro stated, “We bought the Carver Financial institution constructing in February at [four-story] 75 W. 125th for $19.Four million” — $700 a sq. foot, a Harlem report for an workplace constructing with ground-floor retail. (It was $900 a sq. foot, not together with the basement).
Carver is shifting its workplaces to a different constructing close by, however is preserving its ground-floor retail house underneath a lease with new proprietor Gatsby Enterprises.
As for 125th Avenue’s jap finish, Tortorici believes the MTA and main web site homeowners the Durst Group and Extell will cooperate to permit growth to proceed in tandem with still-uncertain subway plans as a result of “their pursuits align.”