A major overhaul of condo construction, which will likely be completed by 2019, is expected to be done in the next two to three years, according to a group of investors led by Goldman Sachs.
A major revamp of condo production, which has already begun in some of the most expensive areas of Manhattan, is anticipated to be completed in 2019.
The two-pronged plan calls for building more than 2,000 condo units and demolishing a total of 1,000 buildings over the next decade.
The plan is based on a $1.3 trillion asset class called REITs, which stands for “retail and investment-grade” and have grown to $1 trillion in value.
A key difference between the two plans is that the first plan would create a new REIT, rather than demolishing the existing one.
The second, the new version of the plan, would build about 1,200 new units and would destroy almost 2,600 existing ones, according the group’s latest analysis of the REIT market.
RealtyTrac, which tracks REIT markets, said in its latest REIT price forecast that the new plan, if implemented, would see prices in the mid- to high $600,000 range by 2022.
It also expects that about 60 percent of the new units would be residential.
The average REIT valuation in Manhattan was about $1,200,000 in 2013, up from $1 in 2000, according an analysis by the real estate website Realty Trac.
New York is also in a market of rapid growth, with new apartments starting to pop up in the most desirable areas of the city, like Brooklyn and Manhattan.
“As a new development boom develops, the demand for more apartments in the city becomes greater and more costly for the existing buildings, making it more expensive to demolish buildings,” RealtyTrac CEO John Foti said in a statement.
The REIT plan could change the skyline of Manhattan.
The city is already home to two of the highest rents in the country.
The median rent for an apartment in Manhattan is $1 million, according a study from the Urban Institute, which analyzed the median income for renters in the boroughs of Brooklyn, Queens and Staten Island.