Sixth Avenue and Canal: Downtown's new lifestyle intersection

Real Estate Weekly, Dec 26, 2007 by Ivan Hakimian

With the recent news that the buyers of the old Moondance Diner property have possible plans for a new hotel, it seems that lower Sixth Avenue is about to become a major hospitality corridor The SoHo Grand started it all almost 15 years ago. Then came the Tribeca Grand, just a short walk away. Now comes news the Moondance Diner site may be home to a new hotel, named 27 Grand Street, according to the New York Post.

I brokered the sale of the Moondance Diner--officially 80-88 Sixth Avenue on the corner of Grand Streets. I also brokered the sale of two adjacent sites on Grand Street and Thompson Street. The 80-88 Sixth Avenue site is just one block north of One York, a new luxury condo development. Around the corner, on West Broadway, is the SoHo Mews, yet another luxury condo building. Of course, the project in the neighborhood that has commanded the most attention is Trump SoHo at 246 Spring Street. Many consider Trump Soho to be a catalyst for significant change in commercial, residential and hospitality development--and prices--in the area.

When hospitality begins to dominate a neighborhood, everything shifts. More tourists come. More business travelers come. New office buildings and convention or meeting spaces open. Rents and purchases prices rise. Services sprout up in the neighborhood. More restaurants open. The Meatpacking District is one example, as both Soho House and the Gansevoort Hotel reshaped the area.

What's happening in and around Six Avenue and Canal is very exciting. Recent speculation that a Trinity Church-owned property at 417 Canal may become an office tower only confirms the change underway in this area. A new office high-rise will likely draw tenants out of the neighborhood's smaller loft office buildings--which usually have no services--leaving those properties ripe for conversion or new development.

Little Italy and Chinatown anchors the other end of the this evolving district. Two hot addresses in that area: 136 Baxter, or The Machinery Exchange Condominiums--a luxury loft conversion that is attracting famous artists and rock stars, and the 100-200 block of Lafayette, soon to be home to a Mondrian Hotel, like the one in Los Angeles.

As quickly as all this is happening, there are still incredible commercial values along the surrounding blocks. On Broadway just under Canal Street, rents go for less than $200 psf and purchase prices around $400-500 psf. Buyers and investors who want to be part of the city's next great destination area should start planning now.

BY IVAN HAKIMIAN, SENIOR SALES ASSOCIATE, ITZHAKI PROPERTIES