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Related Takes Two for the Price of One In Carnegie Hill

Planning the massive luxury complex under construction at 215 East 96th Street, The Related Companies wanted to have it both ways. Confident that the pricey and popular Upper East Side Carnegie Hill enclave is pushing northward, it wanted a perpetual stake in the area. But building in a white-hot condominium market, it couldn't resist the payoff from for-sale apartments.

One Carnegie Hill broke new ground for the company with a novel hybrid concept, splitting the 42-story building across the middle, offering condominiums from the 23rd floor to the top, and rental apartments below.

It's the first of Related's 17 rental buildings throughout the city to offer both rentals and condos. Developer Bruce Ratner is also planning both condos and rental apartments for a 75-story skyscraper on Beekman Street near City Hall. Frank Gehry will design the building.

The plan seems to be working for Related: 75 percent of the condos sold out in just a few months. When the company bought the land-lease from the Islamic Cultural Center, whose mosque will remain west of the new building, "the initial intent was to build a rental building," according to Susan DeFranca, president of Related Residential Sales. The company has two other rental buildings in the area: the Monterey on 96th Street and Third Avenue and Carnegie Park at 94th Street and Third Avenue, which opened for occupancy in 1986.

"But we realized," says DeFranca, "that when we had turnover in our rental buildings, 90 percent of the people who were leaving wanted to capitalize on the low interest rate environment and to partake in home ownership."

That amounted to a built-in pre-construction market for One Carnegie Hill. "We sent out an e-mail blast to the people at the Monterey and Carnegie Park," says DeFranca, "offering incentive programs, including flexible terms on their current leases and a 60- day grace period so they don't pay rent and maintenance at the same time."

Early buyers did well. According to Alicia Goldstein, director of marketing and communications for the company, "the demand has been so great that where we started our prices just under $800 per square foot, we're at $1,000 now." Prices for rentals haven't been offered yet, since the building will not be ready until the beginning of 2006, and renters typically don't look until a month or two before they're ready to move.

"We saw this product as offering a kind of transition," says David Wine, president of Related Residential Development. "Looking at the marketplace, we saw you were getting a lot of new buildings appealing to the very top of the market, with very large apartments - two-bedroom apartments averaging 1,400 square feet and going all the way up to 2,000 square feet. We felt there was an opportunity to create a great apartment that serves as a transition from a rental to that super-luxury product."

Wine said three-bedroom apartments in the building range from $1.9 million to $2.2 million. "You can't touch a three-bedroom apartment on the Upper East Side for much less than $3 million today," he adds. "And two-bedroom apartments are about $1 million to $1.4 million, versus other condos where two-beds are $2 million."

Ismael Leyva, the executive architect and designer of the apartments at One Carnegie Hill, said small apartments kept prices down. "The units are not that big, but very well-designed," he says. "We tried to utilize every inch in the apartments, and cut circulation to gain space for furnishings." In the three-bedrooms, formal dining rooms were traded for eat in space in the kitchens.

The high-floor condo units have the best views, but otherwise the units throughout the building are the same except that the condos all have hardwood floors, while rental bedrooms are carpeted so they can be renewed easily when a new tenant comes in.

To give the units a spacious feel, open kitchens were utilized and wherever possible floor-to-ceiling windows were installed, especially in the corner apartments.

A lobby with a vaunted ceiling overhead is shared by both the tenants and renters, who will move to separate elevator alcoves to reach their apartments. All residents share the amenities as well, which include a 16,000-squarefoot third-floor facility with fitness center, spa, pilates room, massage room, aerobic room, children's playroom, business center, pet spa and landscaped outdoor terrace with barbecue areas. The building also has a rooftop deck, indoor garage and 24/7 concierge.

"The only disadvantage could be if someone is buying as an investment - buying to rent," says Jacky Teplitzky, executive vice president at Prudential Douglas Elliman. "If the market is soft, they would be competing with The Related Companies for renters. Related is a big landlord who could offer perks, and a private owner would have more of a problem offering those perks."



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