February 17, 2011
By Staff Reporter
The noiresque bar, situated at the corner of 46th Street and 8th Avenue, had long resisted everything going on around it. Time Square had been getting the Disney treatment for a decade and McHale’s sat on its outer edges, unbothered for some time.
Unbothered, that is, until Jan. 1, 2006, when the bar and restaurant closes to make room for a 42-story high-rise.
The building, which was sold for $30 million dollars, currently stands at just six stories and was home to McHale’s for the last few years thanks to a “handshake” deal, according to McHale, who took over the business from his father in 1981.
The establishment is perhaps best known as a hangout for stagehands from nearby theaters, but also a place where the occasional high-wattage star can pop in for a quiet drink. The burgers were constantly voted among Manhattan’s best, and no, they don’t take credit cards.
The building’s new owners, 46th Street Properties, have not gone public with any plans, but it could be a safe bet that the new building will fall into place with the new Manhattan landscape. In place of the stately glamour of yesterday — not that McHale’s was anything but wood-paneled and unpretentious – will likely be a luxury development that is sleek, slick and expensive.
McHale’s sale heralds the news that it is not really the price of what’s being built, but the land that is driving up costs. Neighborhoods that have fallen into various states of disrepair are being brought back with the construction of condos and the big money that moves in soon after.
People are laying out for the best of everything, be it appliances, charm, or a big-name architect.
$1m plus
There is no getting around it — you need some serious cash to get your hands on prime Manhattan real estate. In fact, the average home price there is over a million dollars.
Even more shocking, “home” usually constitutes a single-level apartment with views that may require some imagination. Positively numbing is the fact that over 50 percent of all the dwellings in Manhattan fall into this “1 million plus” category, according to the 2000 Census. That number has only increased by 2005 standards.
Land is the real currency of Manhattan. And land is so scarce that building up is the standard, and it is going for so much money that functional things like gas stations are being torn down to make room for more buildings.
And let’s be clear, it’s Manhattan we’re talking about, not the city as a whole. Indeed, New York City doesn’t have the most expensive real estate market if one takes median home price as the measure. In the five boroughs, the median home price is $211,900, whereas it’s $395,000 in San Franciso and $153,300 in Salt Lake City.
The cost of really living
Living at the most prestigious addresses comes with a hefty price tag, but there seems to be no shortage of residents willing to pay.
Prices are around three quarters of a million dollars for a one-bedroom on a high floor of the Orion, a newly constructed building on 42nd Street and 9th Avenue.
Even for a studio that a foreign investment buyer might want to keep for the weekends will cost upwards of half a million dollars.
News was made this summer when the average price for residential property in Manhattan topped $1.3 million for the first time ever, according to reports by Prudential Douglas Elliman, a real estate agency that publishes reports on trends in condo and co-op apartment sales.
In the most extreme cases, plans are being sold for upwards of $4,000 a square foot, which was unheard of a few years ago.
Looking at what is bringing in buyers at these prices is a combination of amenities, location and a few x-factors.
Sheer size will always draw top-dollar. Developers of newer buildings are chancing their luck with large penthouses and floor-through apartments to give people more of what they generally don’t have in Manhattan — space.
There is also the hard-to-explain quality of “charm,” which has many definitions. Some people love the modern touches that grace newer developments, while others seek out lofts and converted factories.
As Manhattan’s industrial past becomes more obsolete, there is a glut of buildings with commercial use, which some buyers find to have residential charm.
The New York City Planning Board is constantly holding hearings to decide the fates of historic buildings that developers want to turn into million-dollar homes.
Developers are not underestimating the power of big names, either. Richard Meier, one of the most famous modern architects of all time, broke his own rules to design the interior of his 165 Charles condominiums. Santiago Calatrava has been picked to design 80 South St., which is to be unlike anything currently out there. Units have been described to potential buyers as “floating boxes” in the sky.
Next week:
The Irish Echo takes a look at the hoops one must jump through to take the plunge as a foreign buyer. Legal repercussions and tax burdens could be just the start – we will be talking with real estate lawyers about how one goes about making what could be the purchase of a lifetime.