A Parade Of Condos Enters The Market
[New York Times, 17 September 2006]
By VIVIAN S. TOY
AT one corner of Mott and Hester Streets, sidewalk bins at a Chinese grocery overflow with dried shrimp, and a bakery sells sweets filled with red bean paste, while across the street, lunch menus at the Original
Vincent's Restaurant promote the day's linguine specials.
But there is a new sign at this intersection, which
many people now consider to be the heart of Chinatown.
It reads: "Hester Gardens, Luxury Condominiums."
In an area that has been defined for more than a
century by densely packed tenements that have been
home to working-class immigrants, Hester Gardens is
proof that Chinatown is finally sharing in Manhattan's
housing boom, and as a consequence, the neighborhood
is opening to a much broader slice of New York City.
"There is a lot of new construction in Chinatown right
now, and it's being built by Chinese and non-Chinese
investors," said Lisa Chin-Tostes, a vice president of
Manhattan Apartments Inc., who is very familiar with
Chinatown real estate. "It seems like everywhere I
turn, I see a new building going up."
At least five high-end condo buildings have opened in
Chinatown in the last two years, and at least eight
more are under construction or being planned. The
different developments offer a wide range of
amenities, and prices are often at or above $1,000 a
square foot, the average for all Manhattan apartments.
Some of the buildings have penthouse apartments
selling for as much as $3 million, and they come with
luxuries like whirlpool bathtubs and built-in
flat-screen televisions. Other buildings cater more
specifically to an upscale Chinese-American market,
which prizes luxury but also places a higher premium
on features like well-ventilated kitchens to
accommodate Chinese cooking than on shared amenities
like a fitness center or an elaborate lobby.
Either way, the new buildings are attracting buyers
who previously might have never considered living in
Chinatown. There are non-Chinese New Yorkers looking
for an alternative to SoHo or the Lower East Side,
including creative types who want to be near art
galleries or young families who want to enroll their
children at top public schools in Lower Manhattan.
But there are also Chinese-Americans who in the past
would have been more likely to spend their real estate
dollars in trendier parts of Manhattan or in the
suburbs, including professionals who work in Chinatown
and are looking for pieds-a-terre.
The new construction will blur Chinatown's boundaries,
but there is little fear of Chinatown's being
completely overrun, since many of the projects are
geared specifically to the Chinese market. Still,
local community groups fear that the new development
could lead to an erosion in affordable housing for new
Some of the fuzziness on boundaries can be attributed
to marketing campaigns.
The Web site for 123 Baxter Street, an address on the
cusp of Chinatown, markets the area as "SoHo South," even though the building sits directly across the
street from Public School 130, where the student
population is 88 percent Asian. The building has
scheduled its grand opening next month.
Lisa Maysonet, a senior vice president at Prudential
Douglas Elliman, the 7-story, 23-unit building's
exclusive broker, said its location and special
features like Brazilian cherry-wood floors and wine
refrigerators would appeal to people "who want luxury
but want to stay under the radar and who think SoHo is
too trendy already -- I think trust-fund babies with
ripped jeans is the profile we're looking at."
William Fegan, a partner in TriBeach Holdings, which
last year finished turning a 12-story garment factory
building at 129 Lafayette Street into 27 luxury condo
lofts, said: "It used to be that Little Italy felt
threatened by Chinatown, but now SoHo is pushing over,
and Chinatown is receding and feeling threatened. The
whole corridor is getting gentrified."
Even as SoHo pushes in on the western edge of
Chinatown, the Lower East Side is doing the same to
the east. The building at 173 East Broadway, which
originally housed The Forward, the Yiddish newspaper,
and more recently the Chinese Alliance Church, has
been converted to 29 high-end condos marketed as being
on the Lower East Side.
Michael Bolla, the exclusive broker for the 10-story
building, said that many of the apartments sold for
$1.5 million to $2.5 million and that one buyer spent
$4.5 million for an entire floor.
"A few years ago, who would have ever imagined these
kinds of condo prices in Chinatown?" said Charles Lai,
the executive director of the Museum of Chinese in the
Americas. "This is either a renaissance or
gentrification to the hilt."
But he said he believed Chinatown would survive
despite its shifting borders. Lafayette Street may be
a new frontier for SoHo -- Cathay Bank opening its "SoHo Branch" on the first floor of 129 Lafayette --
but Mr. Lai noted that the street was still home to
many institutions catering to the Chinese, like the
Chinatown Dialysis Center.
Mr. Fegan, the developer of 129 Lafayette, said the
building was originally not marketed as being in SoHo "because we didn't want people to be disappointed when
they discovered they had really ended up in
But the apartments at 129 Lafayette have a SoHo
aesthetic since they are in a converted industrial
building, and asking prices rose from $650 per square
foot when they went on the market about two years ago
to $1,000 per square foot within a year.
Michael Chapman, a broker at Stribling who sold most
of the apartments and bought a two-bedroom there
himself, said the building attracted photographers and
designers, investment bankers and a few Chinatown
"Some people who looked initially didn't move forward
because they thought the neighborhood was too
Chinese," he said. "But I just love it because it's
much less crowded than central SoHo, and it's quiet in
Ed Rawlings, one of the architects involved in the
restoration of 209 Hester Street, at Baxter Street,
said his project's investors "really appreciate its
being on simultaneous and overlapping boundaries."
The six-story building, a former police stable later
used as a warehouse, will have a floor added to it and
will be converted into 14 high-end condominiums,
including several triplex maisonettes with private
Mark DuBois, the other architect on the project, said
that special zoning in the area protected the scale of
the neighborhood by limiting heights to seven stories. "I think that ensures that this whole stretch of land
that used to be a no man's land is going to be a
transition zone that's different from the crowds and
heavy retail in SoHo," he said.
Hester Gardens, at 158 Hester Street, is just two
blocks east of Baxter, and has penthouse apartments
priced as high as $1.67 million and offers granite
countertops and hardwood floors, but it gives itself
away as a development geared to the Chinese-American
market because it lacks what would otherwise be a
basic amenity in a building of its kind -- a gym. The
8-story, 61-unit building has attracted a mix of young
professionals and retirees, as well as Chinatown
professionals looking for pieds-a-terre close to work.
Irene Eng, who is in her late 20's and grew up in
Queens, works in advertising in Midtown and shopped
for apartments in Queens and elsewhere in Manhattan
before buying a one-bedroom in the building. "I
probably didn't envision moving to Chinatown while I
was growing up, but times have changed," she said.
Peter Poon, the architect who designed Hester Gardens,
bought an apartment that he will use as a pied-a-terre
to avoid the long drive home to Scarsdale after a late
night at work. But he eventually plans to turn the
apartment over to his parents, and he was surprised
when he found others just like himself.
"I think this was a market that not too many people
were thinking about when we started, but all Chinese
somehow want to be involved with the welfare of their
parents," he said.
George Chung, a 74-year-old retired real estate
investor and one of the first buyers to move into
Hester Gardens, said he watched as the building went
up and called for an appointment as soon as he saw a
phone number posted outside the building.
He traded in an apartment in Flushing, Queens, he
said, "because I belong here in Chinatown." He said he
could get the best Chinese food, have easy access to
Chinese newspapers and videos and still get anywhere
else in the city quickly since he's near nine
different subway lines.
Shing Wah Yeung, the vice president of Well-Come
Holdings, which developed Hester Gardens, said that
many buyers learned about the building by word of
mouth and added that the rising inventory of
apartments across Manhattan had made it a little
harder to sell. "But Chinatown is a different animal
compared to the rest of Manhattan," he said. "In many
ways it's an easier market to target than the
Well-Come Holdings' last big project in Chinatown was
an 11-story, 81-unit condominium completed two years
ago at 148 Madison Street, right next to the Manhattan
Mr. Yeung said the finishes there were more basic --
carpeting instead of hardwood floors and tile instead
of marble in the bathrooms. Condos at 148 Madison sold
for about $450 a square foot originally, and many
buyers were Fujianese immigrants, including some who
live outside Chinatown and rent their apartments out
to fellow immigrants. (Chinatown's population
historically has been Cantonese, but most new
immigrants in the last 10 to 15 years have come from
the southeastern province of Fujian.)
Philip Lam, who owns Green City Realty and manages
many of the apartments offered for rent at 148
Madison, said many of his clients run Chinese
restaurants in places like Ohio and Pennsylvania. "But
they buy the condos as an investment, and so when they
retire they can move back to Chinatown," he said.
Apartments there have appreciated significantly, with
asking prices now hovering at $850 per square foot, or
$560,000 for a studio and $698,000 for a two-bedroom.
Another new project on the eastern end of Chinatown
that will probably appeal to the Fujianese market is a
13-story condominium planned for 136 East Broadway.
Mr. Lam, who is working with the developer, said that
since most Chinese immigrants tend to prefer washing
their dishes by hand instead of using a dishwasher, "we'll save that space for a washing machine."
He added that the building's designers have been told
to find top-of-the-line exhaust hoods for the stoves, "because Chinese cook a lot of fish, and that requires
Mr. Lam said that even as apartment prices have risen
in Chinatown, they are still low for Manhattan. "The
prices have gone up, but compared to the Village or
Midtown or TriBeCa, these are still very good prices," he said.
In a four-story walk-up on Market Street recently
renovated by Mr. Lam's company, relatively low rents
have attracted non-Chinese tenants. Tom Vitale
recently moved into a one-bedroom that he rents for
$1,600. "I looked everywhere below 14th Street, and
Chinatown is pretty much the only place I can still
afford," he said. Three immigrant families shared the
space that he now occupies, he said, "so the tide is
But it is often hard to forget that his street is deep
in the Fujianese part of Chinatown. "You can walk down
the street and not see another single white face for
10 minutes," he said. "I feel a little like an
outsider, but that's O.K. because everybody in New
York City is an outsider."
All the new development, which includes at least five
hotels, may be a sign of the area's healthy real
estate market, said Mr. Lai, the museum director. "But
the big question is how it will impact the historic
core of Chinatown and whether the lower-income people
who live here and the industries they work in can also
continue to survive."
Chinatown's garment and restaurant industries were
hard hit by Sept. 11, he said, and have yet to recover
Because most of the new projects are on undeveloped
land or in buildings vacated by garment factories, few
working-class Chinatown residents have been directly
displaced. "But the concern is that as the prices
continue to go up, there will be more pressure to push
tenants out," said Robert Weber, the director of
public policy at Asian Americans for Equality, a
nonprofit agency that works for affordable housing.
Mr. Weber's group helped persuade the Lower Manhattan
Development Corporation to set aside $16 million for
acquiring Chinatown buildings to maintain them as
low-income housing. But finding apartment buildings to
buy has been harder than anticipated, Mr. Weber said.
"Landlords want a lot more for these buildings than
what they should be worth," he said, citing a 20-unit
tenement building on Henry Street where the owner
asked $3.8 million but the building's rent rolls
suggested it was worth only half that much. Rents in
the building ranged from $47.77 a month for a
rent-controlled apartment to about $1,000 a month.
Mr. Lai said SoHo's growth at the western edge of
Chinatown was also sure to be a continuing concern for
the area. The museum has plans to move from its
current home in a converted school building on
Mulberry Street to an old warehouse building on Centre
Street, on a block that is ripe for condo conversion.
"Some people say to me, 'Charlie, you're a traitor for
leaving the heart of Chinatown,'" he said. "But then
others recognize that Centre Street is in fact in
Chinatown, and they say, "You're going to be our
fortress, and this way we can stop SoHo from
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