To understand what’s happening in the Financial District and Battery Park City real estate markets, we interviewed several award-winning Certified TopAgents who specialize in the area.
Jon Phillips & Ginnie Gardiner, Halstead Property: A husband and wife team, they almost exclusively represent sellers and developers. They are members of Halstead’s Gold Circle, Platinum Circle and Producer’s Council and have extensive experience in the Financial District and in Battery Park City.
.
Paul Gavriani & Vincent Falcone, The Corcoran Group: Paul and Vincent lead a team of seven agents. Since 2006, they have been members of Corcoran’s President’s Council (Top 25 agents in entire company). They have extensive experience working with investors and first-time buyers purchasing in the Financial District and in Battery Park City.
What makes the Financial District and Battery Park City different than other neighborhoods in New York City?
Paul Gavriani: Obviously, you have Wall Street there…this area is where many of the international banks and financial institutions have their offices. However, since 9/11, the Financial District has become much more of a residential area. New York City enticed residential development in the Financial District by offering developers tax abatements, such as the 421-a tax abatement. For ground-up development, the abatements typically last 10 years but in the Financial District, New York City provided up to 12-15 years of abatement, so that attracted a lot of buyers. New York City wants to make the Financial District an 18-hour neighborhood. They have tried attracting retail stores to provide the services that are necessary to live in the area—such as grocery stores. However, quite a bit of the retail that has leased space in the Financial District has been more high-end retail, such as Tiffany’s, not the everyday services that people who live in the neighborhood want.
Jon Phillips: The Financial District has great ambiance and architecture. You have the Seaport, a number of parks and a large amount of restaurants. Still, the retail element is mostly missing. The residential market in the Financial District has the potential to be very vibrant if the City could figure out the symbiosis with the retail aspect. The retail never came in to support the residential development. There should be a Whole Foods in the Financial District just as much as “Pink” Shirts. They need the basics; they need the neighborhood stores. If there was that support, and the educational support was maintained, the Financial District could become a new, vibrant area. It’s halfway there, but having an awkward adolescence.
Vincent Falcone: Battery Park City is next to the Financial District–you simply need to cross West Street–but has a much different feel. Battery Park City started as 27 acres of landfill from the World Trade Center development project. New York City literally built more land onto the island. The City leased the land to developers who build condos and rental buildings. Because the land is owned by the state (which acts as a landlord of sorts), property owners don’t pay taxes to New York City. Instead, they pay PILOT — Payment in lieu of taxes. PILOT is much higher than the taxes you would pay in other neighborhoods, so the cost of ownership is pretty high. On the upside, most of the buildings are relatively new and have great amenities, and the physical space, with its parks, waterfront, and art is fantastic. It’s a relaxing neighborhood and right next to the Financial District.
What are you seeing in the Financial District and Battery Park City market these days?
Ginnie Gardiner: It is rough in the Financial District these days. There is a serious inventory issue, so supply far outweighs demand.
Paul Gavriani: Over the past 10 years, developers went in and built many brand new rental buildings or converted rental buildings into condominiums. Many of the buyers in the Financial District or in Battery Park City were investors. Between the investors who had purchased new condominiums hoping to rent them out and the new rental buildings, there is a lot of rental inventory on the market–which pushes rents down. That has made it more difficult for investors to get the rents needed to make an attractive investment which, in turn, has really hindered the market. I would say that over 50% of condo units in the Financial District were purchased strictly by investors who never intended to live there and wanted to rent it out.
What advice would you give to buyers looking in the Financial District or in Battery Park City?
Ginnie Gardiner: Feel free to put in aggressive bids. Unlike in some other neighborhoods, in the Financial District, you can take a shot and see what the market will bear. You might end up finding a seller who really has to sell.
Paul Gavriani: There are great deals to be had in the Financial District and Battery Park City, but choose to buy for the right reasons. Plan on being there for the long term if you’re planning on making the neighborhood your home. Don’t think about buying and holding for 3-4 years and then selling because there’s no way to know how soon prices will rebound. This also holds true if you’re an investor – plan for the long term and be prepared to have a shortfall in rental income until the market comes back. What will help to stabilize pricing in the neighborhood is that there are very few new buildings (either new construction or conversions) being planned thus inventory levels should remain flat.
Jon Phillips: For investors with a 5-10 year investment horizon, there is some tremendous investment potential. They can pick up investment properties at 1995 levels.
What advice would you give to sellers in the Financial District or in Battery Park City?
Jon Phillips: Moreso than in any other market in Manhattan, in the Financial District and in Battery Park City, sellers need to be hyper-aggressive in their pricing to get any response. Don’t be insulted by low offers. Try to price a property aggressively enough so that you receive more than one to get price competition. You’re better off pricing extremely aggressively and having buyers bid against one another.
Paul Gavriani: If you need to sell it’s essential that you price your apartment aggressively. Despite extremely competitive market conditions and an abundance of inventory, apartments are selling. However , the only apartments which are selling are those which are priced right for this market. An experienced broker can assist you in developing a pricing strategy.
Click for independent reviews & profiles of top agents who specialize in the Financial District & Battery Park City.
