Table-rattling blasts and water outages from Second Avenue subway construction became a fact of life at the Georgica, a luxury Manhattan condominium on East 85th Street where Kevin Wilcox and his family bought a penthouse pied-a-terre in the summer of 2011.
"It was a mess to say the least, you really had to take a long-term look at it," said Mr. Wilcox, who works in private equity and is based in Little Rock, Ark. "I took the view that I was probably buying at a discount if we could outlast it."
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Now that the mythical Q-train, Second Avenue line, has opened on New Year’s Day after nearly a century of planning, residents like Mr. Wilcox, who took a leap of faith on properties in somewhat sleepy neighborhoods east of Third Avenue, are watching their investments pay off with value appreciation and a flurry of new shops and amenities flooding the area.
Average price per square foot at the Georgica has increased 20% since 2012, according to CityRealty. The only unit on the market in the building, a three-bedroom, is in contract for an asking price of $2.995 million—50% more than what the first owner paid in 2010.
Across Yorkville, the neighborhood spanning blocks east of Third Avenue from East 97th Street down to East 72nd Street and until now a train-line desert, prices have increased since the Q became a certainty. As of Dec. 1, the average square foot of a condo in Yorkville cost $1,465, roughly $400 more than the average for all of Manhattan, and the highest rate in the neighborhood’s history, according to CityRealty.
One of the the first movers in terms of new luxury condominiums east of Third Avenue was The Brompton on East 85th Street, designed by prolific high-end residential architect Robert A.M. Stern and built in 2009. The building, where ownership includes membership to an Equinox gym on the ground level, has likewise has seen price per square foot rise precipitously in the past four years, where it now hovers just shy of $2,000.
Sales activity has been up over the last decade
The effect of the subway line has been seen in the sheer number of sales east of Third Avenue, said property appraiser Jonathan Miller, chief executive of Miller Samuel and author of the Douglas Elliman reports.
"The first sign of improvement was not in pricing but in sales activity. In the last decade, the neighborhood saw more sales activity than it I think it would have otherwise," he said.
Mr. Miller believes that most of the payoff directly from the Second Avenue line has been priced into Yorkville homes already in the past two years, meaning he doesn’t expect the Q’s official opening to trigger immediate growth in home prices in the neighborhood.
But in the long-term, traffic from the Q will likely give a boost to amenities along Second Avenue and to the east, attracting artisanal groceries, trendy fitness facilities and more fine dining options—all services that attract luxury buyers and developers.
Amenities, shops have increased in anticipation of the new subway line
Real estate agent Charlotte Van Doren of Stribling & Associates described subway lines as the spine of a neighborhood from which the ribs, in the form of shops and amenities, emerge. She said as much to Mr. Wilcox when she sold him his penthouse at the Georgica.
"I told him, ‘This area is going to be fantastic but you have to be patient. When the Second Avenue subway opens, there will be a kind of revival, and an explosion of new retail and fantastic restaurants,’" she said. "And in fact, that has come to be."
Another Equinox gym opened over the summer at the base of the Easton, a pricey rental building that opened last year at East 92nd Street and Third Avenue, which provides amenities like teen study nooks, rehearsal rooms and pet grooming.
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Also last year, the uber-popular barbecue spot Mighty Quinns opened a branch smack on Second Avenue and 78th Street, and a new seasonal, "California-style" restaurant, Blake Lane, opened in the past fall.
And newly opened Eastfield’s, a sister restaurant to popular Upper East Side eatery "The East Pole," is selling trendy items like a macrobiotic plate and subbing cauliflower for potatoes on York Avenue.
"The kinds of restaurants and boutiques has changed drastically in the last year. Organic cafes, Asian-fusion restaurants," said Jason Lanyard, an agent at Stribling & Associates. It’s these new arrivals piggybacking off the subway line that will spur more luxury development and buying in the area, he said.
It’s a wild change from even a decade ago, when east of Third was "a no man’s land," as Mr. Lanyard put it. He pointed to Leighton House, on First Avenue, a higher-end development with unobstructed views over the East River that came online in 1990, a much tougher time to sell in Yorkville.
"The developer couldn’t give apartments away. It was like selling someone a condo in a crack den," said Mr. Lanyard. Nowadays, there have been 10 sales in the building this year alone, including a four-bedroom unit that sold for just under $4 million this fall—a major increase from the $2.35 million the sellers paid 13 years ago.
Here to stay
Mr. Wilcox, the owner at the Georgica, said he’s excited to keep watching the neighborhood change and has no plans to sell his Second Avenue penthouse now that the subway line is a reality.
"We are real happy we’ve outlasted it. We want to see what a wider Second Avenue looks like," said Mr. Wilcox, who spent Christmas in New York City. "We’re anxious to stay."