Business

ROCK, HUDSON!

WHEN last we looked, Hudson Square, the micro-hood rising amid the warehouses west of SoHo, was undergoing serious transformation. Two years ago, the entire neighborhood was a veritable construction site, and buyers were snapping up pre-construction units despite the fact that, aside from ready access to New Jersey via the Holland Tunnel, there wasn’t an amenity in sight.

Hike over to Hudson Square today and most of those construction sites have given birth to tall, glassy condo buildings. Residents have moved in. And yet, the amenity scene hasn’t changed in the least.

“In terms of services, like supermarkets, it is definitely lacking that. Just like it was in TriBeCa in the early ’90s,” says broker Mallory Weil of Halstead Property. Six years ago, Weil bought a condo at 505 Greenwich St. She still gets her groceries from FreshDirect or takes her car to TriBeCa’s Whole Foods.

But unlike other downtown neighborhoods, where the current down economy has new development more or less stopped in its tracks, big plans with big names are still on target for completion in Hudson Square. Which means, lo and behold, this neighborhood might still be on its way up.

The nearby Trump SoHo hotel-condo project, due this fall (or summer, depending on which member of the enormous development team you speak with) and selling for more than $3,000 per square foot, might do the most to put this area on the map.

“[Trump SoHo] is a fantastic emblem to have on the corner,” says Prudential Douglas Elliman’s Frances Katzen, who is selling the Renwick, a condo building set to rise in Hudson Square. “[But] the building has had a lot to overcome.”

Despite protests from neighborhood groups and other controversies – including the discovery of a 19th-century African church burial ground on the site – Trump is rising quickly.

“We thought there was a place for younger product downtown,” says Ivanka Trump.

The 46-story, 400-unit condo hotel is joining an area that has established condo buildings, including the Urban Glass House with 40 units, 505 Greenwich with 104 units and the 64-unit 255 Hudson. On the way is the annoyingly named No. 22 Renwick (at 22 Renwick, natch)with 19 units designed by Philip Johnson/Alan Ritchie Architects, and the 44-unit Renwick, at 15 Renwick St.

Hotels are also coming. Take Viceroy New York’s 168 hotel rooms rising at 330 Hudson St., or Four Points by Sheraton’s 150 rooms at 66 Charlton St.

And nightlife has gotten a boost in the area.

“Originally, I had two spots in Chelsea, but I wanted the pefect space in the perfect neighborhood,” says Jon Bakhshi, the owner of Greenhouse, a new, eco-friendly bottle-service venue on Varick Street. “It’s funny. I never realized so many people live right near there.”

Giving even more cred to the area are the slew of media entities – including WNYC, the Weinstein Company, Viacom, New York magazine, Clear Channel and CBS Radio – that have migrated to Hudson Square, thanks to its cheap rent.

None of this is to say that Hudson Square isn’t suffering from the same painful economic squeeze as the rest of the city. After all, fringe areas are often hit the hardest during tough times.

“It’s a pioneering neighborhood. In a faltering economy, where the residential market is weaker, these are typically the first neighborhoods to feel the pain, as opposed to the more established neighborhoods,” says Shaun Osher, CEO of Core Group Marketing. “It’s definitely an appealing neighborhood, but it doesn’t have the cachet of the West Village or SoHo or Flatiron.”

But for early adopters like Weil, who bought off a floor plan at under $1,000 per square foot six years ago, there is still hope for recouping their money if selling is a must. Those who came later might not be as lucky.

“People are still making a profit if they’re initial purchasers, but the people who bought from an original purchaser and now are trying to sell it again are having a hard time making a profit because a lot of them bought at really high prices,” says Weil. “There are some instances where people are going to be lucky to break even if they purchased in the last two to three years.”

Such is the case with at least one resale – a two-bedroom condo measuring 1,457 square feet and priced at $2.15 million, down from $2.295 million – at the Urban Glass House.

“They bought at the top of the market, after the sponsor had increased the prices,” says broker Tom Postilio of Core Group Marketing, who took over sales of the building’s last four sponsor units and is also handling this resale. He estimates that the buyers paid a little more than $100 a foot more than the $1,476 a foot they’re asking.

Sponsors are feeling a similar pain. Of the Renwick’s 44 units, 40 percent sold since it opened in June – not exactly hotcakes.

And after a fast start, Trump SoHo has seen its sales slow. According to broker Rodrigo Nino, president of Prodigy International, 270 units, or about 67 percent of the 400 total units, have sold. It sounds respectable until you find out that the building had sold 53 percent of its units in the first five months after hitting the market in September 2007. That means that 212 units were sold in the first five months, but just 58 were sold in the next 12.

For now, developers say they’re willing to wait it out.

“We have the ability to be patient,” says Harry Jeremias, principal at Harch Group, developer of the Renwick. “We’re not being flexible with the lowballers.”

“People still want to buy in a market with more opportunity; they want to feel they can find what they want in a prime location,” says Katzen. “This location will hold its own and has held as such – no one has rescinded [on an offer]. We were waiting for that because everyone has told us horror stories. But no one has.”

High on Hudson

Just north of TriBeCa and west of SoHo rests Hudson Square. There, encircled by the traffic flowing in and out of the Holland Tunnel (and thus the exhaust, as well), condo owners have found a tiny enclave reminiscent of early TriBeCa. Residents are drawn, not by access to the subway (it’s far), but by the area’s quiet streets and bright and shiny new apartments.