A former truck repair shop on 10th Avenue in Chelsea is to be torn down and replaced by a six-story building geared to gallery and fine arts tenants in what brokers describe as the first nonresidential construction in recent memory in the far-west section of the neighborhood.
The one-story former repair shop, at 289 10th Avenue, between 26th and 27th Streets, is to be demolished by August and will be replaced by next April with a 30,000-square-foot building. Rathe was also quick about building its new office.
The job took only a couple of weeks because company staff did most of the work.
Move-in day was Feb. 1.
The project’s developer is Allen Rosenberg, 38, a real estate investor from Long Island who owns 22 residential and industrial buildings in the New York area.
Mr. Rosenberg is getting development advice from Sinvin Realty, a longtime commercial brokerage firm in the area.Seth Andrew Bennett, a director at Sinvin, says that demand for commercial space in the area, especially from arts tenants, far exceeds the supply, despite the cooling economy and the departure of a number of dot- com companies that had offices in the area.
Mr. Bennett said that interest in the new building planned for 289 10th Avenue had been high and that his firm was talking to a number of high-profile galleries, as well as to a bank.”I think that I could rent space faster than I could build it if the right properties were available in the area,” Mr. Bennett said. At 289 10th Avenue, he said, his firm plans to ask $50 a square foot annually for both ground-level and penthouse space, and $45 a square foot for upper-floor space.
The building will cost $5.5 million to build, he said, adding that Brooklyn Federal Savings had approved a $4.5 million loan for the project.Mr. Rosenberg has a long acquaintance with the area. From the time he was 13 until he was 25, he worked as a self-described grease monkey at the carburetor shop that his father ran next door to 289 10th Avenue. That building’s owners were customers of his father. During the summer of 2000,he began renting the old truck repair shop, intending to eventually turn it into either an art gallery or a restaurant. In March, however, Mr. Rosenberg was approached by a developer who offered to take over his lease at almost double the price to replace the shop with a six-story arts-oriented building. Mr. Rosenberg soon decided to do the same thing, with a goal of erecting fresh rental space that was up to current building and environmental codes and offered amenities like oversized elevators.
The west Chelsea market, however, may not be nearly so robust as it once was. Largely because of the demise of dot-com companies in far- west Chelsea, both asking and signing prices for commercial space have come down significantly in the last four months, said Curtis Woodside, a senior vice president at Wertheim-Sheehan, a brokerage firm that represents tenants.
“For the first time in three years, multiple spaces are now available in virtually every building,” Mr. Woodside said.
Some brokers say that relative to other parts of the city, commercial space in far-west Chelsea is now priced too high. Jed H. Garfield, a managing partner at Leslie J. Garfield & Company, said that the recent “feeding frenzy” for commercial space there had been fueled by signing rents that ranged from $20 to $25 a square foot annually for ground- floor space and $10 to $15 for upper-floor space.
But now that such space is going for $40 and $23 a square foot, respectively, Mr. Garfield says that many galleries are looking elsewhere, like in Brooklyn.
Mr. Bennett, the Sinvin executive, said that other brokers, as well as galleries, were overlooking the tremendous amount of renovation needed by almost all buildings in far-west Chelsea, including the old 5,000-square-foot garages that so many galleries seem to covet.