NYC's Northern Suburbs Get Urban Makeover With Apartment Towers
(Bloomberg) -- A pair of high-rise apartment towers is set to replace a decrepit parking deck in New Rochelle, extending the New York suburb’s effort to draw younger residents by touting its urban feel and access to mass transit.
The 28-story buildings will have 650 to 700 rental units and be a three-minute walk to New Rochelle’s Metro-North rail station, said Seth Pinsky, executive vice president of developer RXR Realty, which will announce the plan today. They’re part of a master plan designed to revitalize the Westchester County city’s downtown to appeal to millennials who might otherwise choose to live in hipper areas like Manhattan’s Chelsea neighborhood or Brooklyn’s Williamsburg.
RXR and other developers are helping to revamp the image of New York’s northern suburbs, traditionally a magnet for families escaping the bustle of the city in search of space, a yard and a place to park the car. Today’s newcomers to Westchester are more likely to want a variety of restaurants, cultural offerings and a train link to the rest of the metro area, all within short walking distance and for a lower price tag than Manhattan.
“Going back years ago, you had Fortune 500 companies moving into Westchester, you had people looking for three- and four-bedroom homes in a suburban community,” said William Mooney, president of the Westchester County Association, the area’s booster organization. “Now you look 30, 40, 50 years later, and you’re seeing a very different kind of transformation taking place.”
In the past six years, developers have built or proposed 50 Westchester County residential projects within half a mile of a Metro-North station, to add 11,231 apartments, according to Mooney’s group.
White Plains, Yonkers
Developments are in the works in White Plains, which is getting 561 units across two towers near the downtown train station, and in Yonkers, where there’s a 16-acre (6.5-hectare) community being built along the Hudson River and a 330-unit apartment building opened in May. Nearby, publicly traded landlord AvalonBay Communities Inc. has proposed three buildings with 609 rentals.
For some people, choosing the suburbs “might be a question of cost,” said Christopher Jones, senior vice president and chief planner of New York’s Regional Plan Association. Apartments in a place like Westchester are likely to be more affordable than in Manhattan or Brooklyn, “and this is the next-best thing.”
Westchester is also trying to draw a new type of office tenant. In an effort called the SmartCity Compact, New Rochelle, White Plains, Yonkers and Mount Vernon are collaborating to make themselves more attractive to startups, such as by investing in high-speed broadband internet.
Whether there’s demand for additional workspace may be questionable in a county where the office-availability rate has hovered close to 25 percent, about twice that of Manhattan, according to Karolina Pardo-Alexandre, research manager for brokerage Newmark Knight Frank. The high rate reflects vacancies at corporate campuses in the northern part of Westchester, where signature companies such as International Business Machines Corp., Mastercard Inc. and PepsiCo Inc. have drastically reduced staff.
Even in the apartment market, Westchester is edging toward being overbuilt, with more than 1,000 rentals in the county’s pipeline for this year, according to Barbara Denham, senior economist at research firm Reis Inc. Vacancies are projected to rise to 4.4 percent this year, from 2.9 percent in mid-2016, Reis data show.
“I think the market can absorb these units, but not 100 percent,” Denham said.
Reis projects rents to rise this year to $2,159 a month on average. In Manhattan the average was $4,126 a month as of June, and in Brooklyn it was $3,198, according to appraiser Miller Samuel Inc. and Douglas Elliman Real Estate. Rents for RXR’s new apartments will be competitive -- some more than the county average, some less, with details still being worked out, Pinsky said.
“You have the pressure that’s coming from New York City as rents continue to rise there, pushing people to look for affordable urban alternatives,” Pinsky said.
New Rochelle, in southeastern Westchester near the Long Island Sound, “seemed stuck” before it adopted its downtown strategy, said Luiz Aragon, the city’s commissioner of development. Historically, the area has been predominantly a shopping district. The city has identified 66 development sites, all but two within a half-mile of its Metro-North station.
RXR, led by Scott Rechler, was retained as lead developer for the city’s master plan, which rezoned 279 acres downtown and allowed for 12 million square feet (1.1 million square meters) of new construction, including 6,300 residential units, about 2.4 million square feet of offices and 1 million square feet of retail. RXR’s “confidence in New Rochelle inspires confidence in others,” New Rochelle Mayor Noam Bramson said.
Last month, the city chose a partnership including MacQuesten Development LLC to build a 27-story tower with 262 apartments and as much as 42,000 square feet of offices on the site of a fire station. RXR is already part of a joint venture that’s working on a project that includes 280 rental apartments and the renovation of an old movie theater as a live-performance space. On Friday, Choice Hotels International Inc. broke ground on an 80-room boutique hotel on Church Street.
The health-care, life-sciences and biotech industries are expanding in the area aggressively and hiring millennials, which will help fill the new apartments, according to Mooney of the Westchester County Association. Demand is also likely to come from retiring baby boomers, who may be downsizing from larger suburban homes.
“They’re looking for a place to live too,” Mooney said. “Most of them came from the boroughs when they were very young, and they like the transit-oriented development.”