New York's Times Square is among the world's brightest tourist and entertainment hubs, with hordes of visitors around the clock ambling past flashing ads on the digital billboards. They typically shop, have dinner, see a Broadway show or just take it all in. Now, for the first time this century, fans of the area can live there in new upscale apartments.
In a sign of high-end residential demand, a luxury multifamily complex in Times Square was fully leased in about 10 months — with market-rate rents well above the New York average. CoStar data shows the 330-unit Ellery as the only Class A rental property to open in the neighborhood in at least 35 years. In fact, some 110 of about 150 existing multifamily properties in the market have at most 25 units, according to CoStar.
Leasing for the 350,000-square-foot property at 312 W. 43rd St. began in June and was recently completed, developers Taconic Partners and National Real Estate Advisors told CoStar News. The Ellery, right off Eighth Avenue and a little more than a block to Times Square’s bowtie-shaped intersection — between 42nd and 47th streets and bound by Broadway and Seventh Avenue — was built on the site of a former parking lot and an office building for 1199SEIU healthcare workers. The union still owns the land in a 99-year ground lease to The Ellery’s developers, said Andrew Schwartz, Taconic’s senior vice president of residential asset management, in an interview.
A quarter of the units at The Ellery, from studios to two bedrooms, are designated as affordable housing, he said. The remaining 246 market-rate residences, with the average monthly rent “a little over” $6,000, range from studios — spanning about 450 square feet and up to $5,000 in rent — to two bedrooms of about 1,200 square feet that command up to $13,000, Schwartz told CoStar News. Three-quarters of the property’s units are one-bedroom residences, followed by 15% studios and 10% two bedrooms, he said.
The market asking rent per unit in the Midtown West cluster that includes the property has risen to a record high of about $4,800, $1,500 above New York’s average of $3,300, also a record amount, according to CoStar data.
The Ellery’s leasing milestone came two months earlier than Taconic expected, with rents coming in 12% above projections, according to Schwartz.
The building has attracted tenants working in finance, law, media and tech fields for firms including Meta, Wells Fargo and Ernst & Young as well as The New York Times just a few blocks south, Schwartz said. He added there is also “a subset of students” going to Columbia University or New York University with their accommodations paid for by their parents.
To be sure, New York is still contending with the larger issue of whether there's enough apartment supply to meet demand. Schwartz acknowledged "it's very hard to find a development site" both in the neighborhood and elsewhere in the city, not to mention developers paying high construction costs. Meanwhile, wage restrictions tied to the city's 485x tax incentive program don't help projects above 100 units get built even as the city loosens rules to encourage more office-to-residential conversions, developers have said.
Taconic isn't the only firm seeking to capitalize on Manhattan apartments. In other neighborhoods, Related Cos. and the Gotham Organization have their own luxury rental properties.
The Ellery has “a few pied-à-terres” both for people who live outside the city and want to spend a few days in it as well as for others such as a Bank of America executive who lives in the suburbs but stays in his unit when working at a Manhattan office two or three days a week, Schwartz said.
Most of the residents are singles or couples with double incomes. “It’s really primarily for people who live and work nearby,” Schwartz said. “They want to walk to work. … They want to be in this neighborhood. They want to be in a new luxury building.”
Neighborhood change
Amid the growing appeal of live, work, play neighborhoods for professionals who want to walk to work, the performance of properties such as The Ellery shows the promise of Times Square in its potential transformation to a livable domain.
“Times Square makes perfect sense as a residential district that allows people to live close to where they work, have great transit options steps from their front door, and allows them the ability to enjoy the great culture, entertainment, and restaurants when they are finished with work,” Tom Harris, president of the Times Square Alliance, told CoStar News in an email. He added that the business improvement district “is encouraged by the confidence that developers have in allowing more people to live in Times Square.”
A case in point: A proposal has been filed to turn the 38-story 5 Times Square at 597 Seventh Ave. between 41st and 42nd streets into a mixed-use residential rental building with up to 1,250 market-rate and affordable units. The property is owned by RXR Realty, SL Green Realty and Apollo Global Management, CoStar data shows. Chess Builders this year landed a $79 million loan from S3 Capital for the purchase and development of a 138-unit Class A rental property at 250 W. 49th St.
The McGraw-Hill building at 330 W. 42nd St. also is said to be planning a partial residential conversion.
“The housing shortage necessitates more multifamily units, while high-vacancy office properties offer a viable opportunity to create those units though a building conversion,” said Jared Koeck, a CoStar Group associate director of market analytics. “It is interesting to see a property like The Ellery get built in the Times Square submarket, which has not traditionally been a haven for multifamily development. … When viewed in conjunction with the proposed office-to-residential conversion at 5 Times Square … and the partial residential conversion proposed at 330 W. 42nd St., it shows a surprising trend: more multifamily units getting created in an area that has traditionally been more focused on the office and retail sectors.”
In fact, in the past 20 years, only three apartment buildings have been constructed in the Times Square market, compared to 19 in neighboring Hell’s Kitchen and 13 in the Midtown West neighborhood west of Ninth Avenue, Koeck said, citing CoStar data. In fact, of the three properties built in the past two decades in Times Square, The Ellery is the only one with more than 50 units, he said.
CoStar defines the Times Square market as the area between 38th and 52nd streets and bound by Sixth and Eighth avenues with an alcove that stretches a block west to Ninth Avenue between 42nd and 48th streets.
Broadway, transit steps away
The Ellery comprises two connected buildings, 36 and seven stories tall, designed by Handel Architects. It offers condo-like finishes, fixtures and unit appliances. It's 100 feet from a Port Authority Bus Terminal transit station with access to about a dozen subway lines, and around the corner from restaurants such as Chick-fil-A. The Lyric Theatre, where the Broadway show “Harry Potter and the Cursed Child” is playing, is down the block across Eighth Avenue.
Inside, residents have access to 30,000 square feet of amenities space including, on the second floor, a landscaped garden and outdoor yard, a gym outfitted with Peloton bikes and Precor fitness equipment, and a spa with a sauna and a steam room. There’s also a coworking space, including communal tables, phone booths and a conference room, that a recent CoStar News visit found was being used by residents.
While coworking was already part of the building’s design concept before the pandemic, Taconic added more space to meet the pandemic-driven trend of people working from home, Schwartz said.
On the rooftop overlooking Manhattan and the Hudson River, residents have access to a private dining room, a double-sided fireplace and a 40-foot outdoor pool, not a common find among Manhattan’s rental buildings, he said.
“The whole idea behind the building is you come off of this bustling area at Times Square, you come into kind of this calm oasis,” Schwartz said.
For the record
Compass Development Marketing Group is the building’s exclusive leasing and marketing partner.