Battery Park City, by Elliot Bogod1200x900
February 17, 2018

Battery Park City

This youngest and southernmost neighborhood of Manhattan, created a little over forty years ago. Until that time, the land on which Battery Park City is situated today didn’t even exist (or rather, the lower part of that land rested at the bottom of the Hudson river, while the top soil existed as the ground over the current World Trade Center area).

In the eve of the Twin Towers construction, that ground had been excavated and moved to form the new land available for real estate development. So, the land under the foundations of Battery Park City buildings is human-made. That land is owned and managed by the Battery Park City Authority, a public-benefit corporation created by New York State, and rented out to real estate developers and building owners under a hundred-year contract.

I should probably mention that typically in New York any buildings constructed on rental land are cooperatives – however, Battery Park City is an exception: most of the buildings here are condominiums, with a few rentals added for good measure. At the time of this writing, there’s still fifty-five years left in the land rental contract – long enough for most banks and mortgage companies to finance condominiums in Battery Park City as if they were built on the condominium-owned land. However, real estate prices in Battery Park City are 15-20 percent lower than in most other neighborhoods of lower Manhattan, due to that rental contract.  Condo owners in Battery Park City, pay about 20% more for monthly services (also known as “common charges”) than what they’d pay in Midtown – but this is compensated by lower prices for the condos themselves.

If less than 25 years remains under the land rental contract, the price of the residential property becomes equal to the difference between the monthly rent dictated by the current market, and the monthly service payments for cooperative or condominium, multiplied by the number of months remaining in the land rental contract. I guess I’ve just said a mouthful, but let me illustrate this with a simple example.

Let’s suppose that there are 20 years (240 months) remaining on the rental contract for the land that hosts your property. The monthly service payment for your co-op or condo (including monthly tax in the case of the condo) equals $3,000, and the same apartment would be rented for $7,000 per month. The difference between the monthly rent and service cost would be $4,000. Multiply this difference by the number of months remaining on the land rental contract ($4,000 x 240), and the result – $960,000 – is the apartment price.

Often the land rental agreements include the option to renew the contract. The buyer must always calculate how the service payment will change when such contract is renewed. Most commonly, land rental agreements in New York do get renewed, even though sometimes that happens after prolonged feuds between the land owner and the land renter.

Battery Park City is remarkable for its parks and closeness to water, and I always recommend it to my clients as one of the best neighborhoods for city living. Its area is, in a way, autonomous – almost a “city within a city” (you’ll have to cross West Side Highway to get to the Wall Street area). There are about 6,000 condominiums and 1,000 apartments for rent in Battery Park City. From the day of being thrown into the market, a typical Battery Park city condominium or rental apartment is gone in 4-6 weeks, because there’s a huge demand for them.

In addition to being unique in its origin and type of land ownership and management, Battery Park City also features some unique buildings and neighborhood attractions. America’s first LEED-certified residential high-rise building, The Solaire, is located here, at 20 River Terrace (LEED stands for Leadership in Energy and Environmental Design and represents one of the most popular green building certification programs used worldwide). Another LEED-certified residential building, Visionaire, at 70 Little West Street, is right next door. The neighborhood also features two highly prestigious hotels: Ritz Carlton and Conrad New York. The latter shares its address (102 North End Avenue) with another grandiose local attraction: a huge movie theater, Regal Battery Park Stadium 11.

Several years ago, just around the time when United States was as the lowest point of recession, Battery Park City received a surprise economic boost: the headquarters of Goldman Sachs, a leading global investment banking, securities and investment management firm, opened in this neighborhood, at 200 West Street. This increased demand for residential properties in Battery Park City (people like to live close to where they work) and brought to the neighborhood new restaurants (such as Danny Meyer’s North End Grill, Shake Shack and Pier A with its Long Hall and oyster bar) and luxury retailers (such as Hermès, Burberry, Zegna, and dozens of others), all situated within Brookfield Place, a commercial rental conglomerate at 230 Vesey Street.

Another event that occurred in the neighborhood is a stuff of legend within Manhattan real estate community: in 2011, a group of 11 condo buildings in Battery Park City put some pressure in the aforementioned Battery Park City Authority corporation, and managed to negotiate a deal that allowed them to lower the combined rental cost of land by $279 million dollars. This additionally boosted Battery Park City’s residential real estate market (and illustrated the fact that building owners are not powerless, even when they don’t own the very ground their buildings stand on)!

This is one of the greenest neighborhoods in the city, and it’s a lot quieter than all the other residential areas in Manhattan: there’s practically no street traffic in many parts of Battery Park City. Also, alas, no subway – you’d have to walk across West Side Highway to get to the closest train station. However, there are five Citi Bike stations here, all placed along the excellent bike lane that connects the neighborhood with the rest of the city – as well as Battery Park City Ferry Terminal, offering access to NY Waterway ferry and water taxis, which are becoming more and more a regular part of New Yorkers’ commute. If you drive, you have easy and quick access to Brooklyn and Staten Island.

Living here, you’ll have the best view of 4th of July firework display and yearly New York Yacht Club regatta, because a great number of Battery Park City apartments offer open view of Hudson river estuary (and the Statue of Liberty), and the architects and engineers made sure to include a lot of balconies in the floor plans. Note that I wrote “made sure”, not “make sure”: the most recently constructed buildings had been completed ibn 2017, and there are no more available lots to build on in Battery Park City!