New Developments, Now By Cost Per Square Foot

Manahttan neighborhood zoning shows cost by square footRecently, MNS released its second quarter report on new development sales, and to our delight, it contains a new metric: cost per square foot. In doing so, MNS is allowing us to compare neighborhoods and their new construction more accurately, as paying more for less square footage indicates that the location or building is partially or entirely the main selling point. What is interesting, however, is that while the same neighborhoods are consistently more expensive, they differ when considering price per square foot, and the winners are in some ways unlikely.

When we look at new development by neighborhood in terms of price per square foot, MNS’ combined Gramercy/Flatiron District neighborhood is the clear winner as well as the only part of Manhattan to average more than $2,000 per square foot. In contrast, the favorites that vie for the title of Manhattan’s most expensive neighborhood -- Tribeca, SoHo, and Greenwich Village (including the West Village) -- are surprisingly low. Of interest is Tribeca, which barely outdoes the Lower East Side in terms of new development pricing; this could be attributed to Tribeca’s almost completely built-out nature, with little new development to drive prices up. SoHo and the Village are still growing, with the former’s addition of the rather large 40 Mercer and Trump SoHo edging the neighborhood into second place.

Other peculiar trends include the Financial District, known for its residential conversions and classic, 19th-century architecture, being the second cheapest neighborhood per square foot for new development. Like Tribeca, this is slightly a mystery considering its reputation for high prices, but like the lowest-placed area, Harlem, perhaps the numbers boil down to simple economics: supply and demand. Both neighborhoods expanded and built rapidly during the residential boom and now have more supply than demand, resulting in lower prices.

Overall, it seems that new development is finally, and quickly, filling up, and that location is more of a factor than ever before. Downtown Manhattan is still the champion of high prices, with SoHo and the Village breaking $1,500 per square foot, not to mention that MNS’ data also shows SoHo and Tribeca, along with Gramercy/Flatiron District, breaking $2.4 million in sales, the only areas to do so. All of this is making us at New Construction Manhattan optimistic about the future of Manhattan’s recent residential additions.