Small lot development - Part 2

 

Small lots in NYC are usually measured at 16-20 ft wide facing the street and 75-100 ft deep in a rectangle shape. There are narrower and shallower lots but not as common. Small lots are spreaded across Upper Manhattan, Greenwich Village, East Village, and parts of Brooklyn and Queens. There are approximately 250,000 of these small lots throughout the city.

Most of these lots already have structure built on the land but you can typically find available air rights. This is where you as the developer can add “value” by enlarging the existing structure vertically or horizontally to create more floor areas. It’s a classic value-add strategy in the real estate world. Some lots are still vacant and you can search and find them easily by accessing the NYC lot data here. A vacant lot is prime for ground-up development, although it takes much more time and capital to develop and is considered more risky.

With an existing structure and available air rights or a piece of vacant land, you are ready to embark on an exciting development project. But before starting, you need to conduct a market analysis to understand what product to bring to the market. In my past post, I went through a 4-step thought process on how to carry out a market analysis. It will help identify the market niche that you can develop successfully.

Neighborhood -> Demographic -> Product type and design -> Supply/Demand and Comps

Generally, there are four types of residential products for small lots, 1) townhouses, 2) boutique condos, 3) multifamily rentals, 4) co-Living or student housing. Each product is unique and looks very differently from one another. I want to share a few layouts of some classic small lot developments so you will have a better understanding of the products.

This is a typical 18’x56’ floor layout for a multifamily rental conversion on a 18’x100’ lot. Developers usually look for 3 or 4-story townhouses and convert them into rental properties like this. During the conversion, additional floors may be added along with extension of the structure into the backyard if possible (more on this in the next part of this series).

This is a typical 20’x65’ floor layout for a multifamily rental ground-up development on a 20’x100’ lot. This type of development usually takes place on a vacant lot with ground floor retail and rental apartments on upper floors. Please note the elevator and trash room in the layout, which are different from the conversion layout presented earlier (more on this in the next part of this series).

This is a typical 17’x64’ floor layout for a triplex unit in a boutique condo building on a 17’x100’ lot. Developers usually look for 3 or 4-story townhouses and convert them into boutique condo buildings. The basement/1st/2nd floors together form a triplex unit with a 17’x30’ private backyard. The 3rd floor is a floor through unit. And 4th/5th floors form a duplex PH floor with a 17x64’ private roof deck. Notice how the design brought natural light to the cellar by adding steps from the backyard along with a landing area just outside of the recreation room with glass doors, a very clever idea which increased the value of the cellar space immensely. 

This is a typical 22’x64’ floor layout for a duplex penthouse unit in a ground-up condo building on a 22’x100’ lot. This type of ground-up development usually takes place on a vacant lot. The basement/1st floors together form a duplex unit with a 22’x30’ private backyard. The upper floors are usually floor through units with two balconies front and back. The penthouse is usually a duplex unit with a 22x20’ private roof deck.