The eastern Upper East Side, a subway desert, is about to see the end of its drought. In December, nine years after construction of the initial phase began — and decades after it was first proposed — the Second Avenue subway is scheduled to open.
For Yorkville residents, who have endured dust, explosions and barricades while workers burrowed tunnels under their feet, and who make long slogs to Lexington Avenue trains, that moment will probably be joyous.
But those who live in apartment buildings between Third and York Avenues, as well as those developing new ones, may already be celebrating: Their property is enjoying new attention and price premiums, a trend that doesn’t bode well for buyers in search of bargains.
“The subway has totally changed things,” said Michael Lorber, an associate broker with Douglas Elliman Real Estate at the Azure, a 128-unit condop at 333 East 91st Street and First Avenue, which began sales in 2008, the year the subway project started. In fall 2014, when Mr. Lorber and his team took over sales at the 34-story high-rise, developed by the DeMatteis Organizations and the Mattone Group, there were 25 unsold sponsor units. By late last month, he said, just three were left, at an average list price of $1,600 per square foot.
The condop, which sits on leased land and was the site of a fatal crane accident in 2008, was hindered by other issues, Mr. Lorber said, but buyers were deterred, in particular, by its relative remoteness. “If the building were built today,” he added, “it would sell right away.”
Measuring the precise effect of the subway construction on property values is difficult, because while the construction has caused a number of inconveniences (including the closing of parts of sidewalks and streets), it also coincided with a massive housing downturn. And this part of the Upper East Side has been falling out of favor for years, brokers say. But anecdotal evidence suggests that prices for co-ops and condominiums here dropped about 20 percent — a discount that is long gone, according to most brokers. Moreover, the prices of many apartments now reflect a subway bonus of about 10 percent, they say.
The modest blocks east of Third Avenue have long had lower prices than the fancier parts of the Upper East Side, known as the Silk Stocking District. But the new subway stations at East 72nd, East 86th and East 96th Streets, and the expanded one at East 63rd, seem to be having an equalizing effect on prices in what used to be more of a cotton socks district. (Initially, those stations will offer access to an extension of the Q line; later, they will service the T train as well.)
Consider the Kent, a 30-story, 83-unit brick, limestone and metal-paneled condo from the Extell Development Company rising at 200 East 95th Street, at Third Avenue. Prices for its spacious two- to five-bedroom apartments, which have up to 15-foot ceilings, marble-lined baths and Miele appliances, will start at about $2.4 million, or $2,500 a square foot, when sales begin in May, said Gary Barnett, Extell’s president.
The average price for condos in Yorkville — excluding East End Avenue, which is often considered an upscale submarket unto itself — was about $1,700 a square foot in late March, according to StreetEasy.com.
Mr. Barnett is hardly a builder-come-lately to the neighborhood. He began acquiring his blockwide site, made up of seven lots, when the subway was still in planning mode in 2005. But improved transportation was on his mind: The subway expansion “gave us confidence that we could invest and do a beautiful product, and that people would pay for it,” he said of his project, which will have a lobby fireplace, a courtyard garden and a pool.
More market-rate Extell projects are planned for the area, Mr. Barnett added, although he declined to provide specifics.
If the Kent will test the ceiling of the market, Carnegie Park, a 30-story brick rental-to-condo conversion at 200 East 94th Street and Third Avenue, from the Related Companies, might indicate the market’s velocity. In about 15 months, the condo has sold 85 percent of its 277 one- to four-bedrooms, which have Caesarstone counters and KitchenAid appliances, according to a spokeswoman for the project, and prices are averaging $1,700 a square foot, with one-bedrooms starting at $980,000.
While the Carnegie Park website doesn’t mention the coming subway — perhaps because the Lexington Avenue line is a block to the west — other developments are more explicit. On the site for the Charles, a new 27-unit, 31-story condo from Bluerock Real Estate at 1355 First Avenue near East 73rd Street, a map shows the future Q and T stop at East 72nd. The building, which has six remaining units, is getting an average of $2,400 a square foot, said R. Ramin Kamfar, Bluerock’s chief executive.
Another building expected to benefit from the Second Avenue line is 389 East 89th Street, at First Avenue, a 31-story rental that the Magnum Real Estate Group is converting into a condo with 156 one- to three-bedrooms. Sales began in February, with prices averaging $1,600 a square foot, a project spokesman said, and one-bedrooms starting at $880,000.
While Second Avenue has improved since 2010, when dozens of businesses were closed, it’s hardly back to its old self. There are still shuttered storefronts between East 93rd and East
94th Streets, and cranes remain visible. But most buyers realize these are temporary inconveniences, said Victor Setton, a salesman with Weichert Rockefeller Center: “They’re taking a long view.”
This month, Mr. Setton is listing a one-bedroom co-op at 301 East 87th Street and Second Avenue, where concrete barriers give the street a work-in-progress look. But the $815,000 price, he said, includes a premium of about $50,000 for the future subway stop around the corner.
Some remain skeptical that the subway, which was originally proposed in the 1930s and has broken ground a couple of times since then, will open on time. The first phase, after all, is being delivered with a bigger price tag — $4.451 billion — than promised, and at a later date. “Who knows when it will ultimately be finished?” said Jay Solinsky, the president of Classic Marketing, which is helping to sell 300 East 64th Street, a 99-unit condo conversion at Second Avenue developed by RFR Holding.
For Elizabeth Dean, the subway can’t arrive soon enough. Ms. Dean, who moved into a one-bedroom in Carnegie Park from a studio in Hell’s Kitchen this winter, commutes to her financial services job in Midtown using the 6 train, though that line is often crowded at rush hour.
The Q train might relieve some of that congestion, she hopes, and drop her closer to work; the Metropolitan Transportation Authority estimates that the trip from East 96th Street to Times Square will take just 13 minutes.