Very few twenty-year-olds have the hard-earned financial capital to afford a million dollar piece of real estate in Manhattan. However, there are wealthy parents who purchase luxury apartments for their children as an investment. Every twenty-year-old has the desire to live in an area of town that they choose. So the ones who have access to capital have influence. Their thumb is on a pulse that is dictated by rising fads, not market prices. This is when investors need to start listening. Where are things happening? How can a parent tap into a trendy area, keep a child happy, and make a cool profit in the process? Let’s look at movement in the neighborhoods that entice the young and hip in New York, determine if today’s cool sets tomorrow’s high-end, and gauge if there’s overlooked investment potential.
In Williamsburg, tattoo parlors are still going as strong as ever. The presence of ink is welcoming to the hipsters in the neighborhood, as it maintains the raw edge of their scene amidst the luxury properties have been popping up around the region. The hipsters are faced with a conundrum. Rents remain very high. It is better to own, but few can afford to as prices march steadily upward. It is like the young and hip in the region are victims of their own sense of cool. That is where the pattern of luxury is set. Once a gentrified haven for the original trendsetters, Williamsburg’s newfound fame is driving prices up across the board. Tattoo artists in the area charge up to $350/hour for their services. These prices are reflected in the retail spaces as well. Ten years ago, retail rents off Bedford Avenue were lower than $15 per square foot, now, the area sees retail rents go for $120 to $160 per square foot.
Luxury real estate in New York is often born from a bed of cool, and the East Houston region is no exception. East Houston Street (i.e., East Village and Lower East Side) has also seen a transformation from crusty to cool with a more well-heeled crowd now flocking to its streets to add high-end venues amidst the scattered bars and bistros. The hipsters can be thanked for that. The sports bar Nice Guy Eddie’s on Avenue A was one of the first establishments to see “cool” replaced with high-end. It now flies under the banner of Ella and the Gallery Bar. Another new club is Jamie Mulholland‘s Five Nightclub, soon to open on Houston and Essex streets.
Most real estate moguls look down their nose at tattooed hipsters in purple pants, but their arrogance can be your advantage. Cool has cache, and the ability to spot a desirable scene, and one-day profitable region, out of twenty-year-old discretion, can be a powerful tool.
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