One of the most important concepts that pertain to investing in real estate is knowing “when” to invest. Every investment market moves in cycles and being able to determine the life cycle of a particular market can greatly help you in locating and securing profitable deals? So the question that remains is “How do you determine the cycle of your local real estate market?”
Although there are numerous ways to accomplish this task, one of the simplest ways to determine the right time to invest is by following the “smart” money.
This statement refers to watching the investment trends among larger investors that are flushed with capital. In New York City, the “smart” money is most certainly associated with the local commercial real estate developers that are currently investing in the residential real estate market, signaling that NOW is the time to invest in NYC residential real estate.
Here are just a few examples of commercial real estate developers leaping into the NYC residential real estate market.
The Durst Organization – Astoria Cove
Although they are best known for developing hi-rise office towers throughout Manhattan, such as the One World Trade Center, the Durst Organization is transitioning into residential real estate investments with the development of Astoria Cove. This $1.5 billion dollar development will feature 2,404 rental units and a variety of retail shopping including a supermarket, bakery, dry cleaners and a multitude of restaurants.
Brookfield Property Partners – Roosevelt Landings
Brookfield Property Partners recently acquired nearly 4000 apartment units in Upper Manhattan for close to $1 billion. This experienced commercial real estate developer, known for its holdings of the former World Financial Center in Lower Manhattan, is also rumored to be developing more residential units as part of its Manhattan West project in the Hudson Yards section of town.
Tishman Speyer Properties – Queens Plaza
Tishman Speyer, owners of the Rockefeller Center and the famed Chrysler Building, are in the process of developing Queens Plaza, a 1,789-unit apartment complex located in Long Island City. In addition to the residential units, the project will also feature 30,000 square feet of rental space and is set for completion in 2017.
While still firmly footed in the commercial real estate scene, this developer is also actively pursuing new residential investment opportunities in Downtown Brooklyn and other strategic locations throughout the city.
Fisher Brothers – 101 Tribeca
The Fisher Brothers, whose history includes the development and management of more than 10 million square feet of commercial real estate, is currently in the process of developing 101 Tribeca. This project is a 63-story high-rise condominium building that will encompass 129 units and more than 433,000 square feet of residential living space.
The company is also in the process of redeveloping 101 Murray Street, a site in Lower Manhattan that once served as an academic building for St. John’s University. The project is estimated to consist of 200 units and encompass more than 310,000 square feet.
The Changing Landscape
Recent trends in the NYC real estate market, such as a steep rise in land costs, has made residential real estate a lucrative opportunity for many savvy investors. The rising cost of land has priced, many real estate developers out of the commercial real estate market. This has caused many of these developers to be lured into the residential market, as the price-per-square-foot that individuals are willing to pay for a residential unit is much higher than what most commercial tenants are willing to pay for the space.
With multi-billion dollar commercial developers entering the residential market, it is further proof that the NYC residential real estate is ripe with investment opportunity. For any NYC real estate investor, this is a clear sign that the “smart” money is moving into residential real estate throughout the city.
As these new development projects change the landscape of the city and their prospective neighborhoods, more demand for housing in these areas are sure to follow, creating a great opportunity for real estate investors to follow the “smart” money and seize this current opportunity.