Reaching High on Upper 5th Avenue

[BLOCK] Ramin Talaie for The Wall Street Journal

Property at 1200 Fifth Ave.

Fifth Avenue north of 96th Street has long been a no-go zone for buyers seeking white-glove luxury, but some developers are betting on upscale buildings in "Upper Carnegie Hill."

Ramin Talaie for The Wall Street Journal

Property at 1280 Fifth Avenue.

"You might say that there's an inevitability to the development of Fifth Avenue on Central Park," said Nancy Packes, an adviser to many some of the city's top residential developers.

For years, the area's development had looked far from ordained. The neighborhood, wedged between Carnegie Hill, East Harlem and Central Harlem, went largely ignored by high-end developers. Instead, it remained a sleepy, middle-class enclave occupied largely by employees of nearby Mount Sinai Medical Center.

But starting during the housing boom in the middle of the last decade, developers began eyeing the pre-war rental buildings lining Upper Carnegie Hill as a missed opportunity for condo conversions.

"It's a step down from Fifth Avenue locations closer to Midtown, but what they're selling are views and proximity to the park," said Jonathan Miller, president of Miller Samuel Inc., a real-estate appraisal firm.

The area's redevelopment started in 2004, when a group of investors purchased an Emery Roth-designed rental building at 1200 Fifth Ave. for $61 million from Mount Sinai, seeking to transform it into luxury condos.

[NYBLOCK_upper5]

Units hit the market in 2006 and the developers aimed high, pricing units on average at $1,839 a square foot, according to StreetEasy. Sales were sluggish through the recession, but now only nine of the units remain, and the developer has achieved pricing of more than $1,700 a square foot, StreetEasy says.

Other prominent developers have followed suit. Durst Fetner converted a pre-war building at 1212 Fifth Ave. at 102nd Street, which it bought from Mount Sinai for $42 million in 2009, into 55 luxury condos.

"We fell in love with 1212 because of its location and having the ability to work with a pre-war building on Fifth Avenue," said Damon Pazzaglini, chief operating officer of Durst Fetner.

[BLOCK] Ramin Talaie for The Wall Street Journal

El Museo Del Barrio at 1230 Fifth Ave.

The building is priced more conservatively than its neighbor at 1200 Fifth, with one-bedrooms listed at $800,000, or about $1,445 a square foot. It won't be ready for occupancy until December, but already one-quarter of the building's units are in various stages of negotiations with buyers, according to Mr. Pazzaglini.

But it was with 1280 Fifth Ave., at 109th Street, that developers sought to establish the neighborhood as a seamless extension of Carnegie Hill. Developer Brickman's ambitious 116-unit condo building was designed by starchitect Robert A.M. Stern, who more famously designed 15 Central Park West.

The limestone-and-glass building resembles some of the city's trophy towers in another respect: wealthy foreigners have been buyers of the condos at 1280 Fifth, according to Ms. Packes, who is marketing the building.

That's generally a sign of the maturity of a neighborhood, since foreign buyers often gravitate to established neighborhoods like the Upper East Side, Columbus Circle and TriBeCa.

[BLOCK] Ramin Talaie for The Wall Street Journal

Property at 1212 Fifth Ave.

Now a museum is also betting that it can draw Fifth Avenue's cultural scene farther north. The African Museum of Art purchased four floors at the bottom of 1280 Fifth and plans to open around the end of next year with 19,000 square feet of exhibition space, an education center and a theater.

For the African museum, which most recently leased space in SoHo, the attraction of the site goes beyond being part of Fifth Avenue's Museum Mile.

"It crosses a variety of diverse communities and sits near Harlem. It's as broad as we can possibly imagine," according to Kenita Lloyd, the museum's deputy director.

There's still a lack of retail activity on Upper Fifth, while nearby Madison and Lexington avenues—the traditional hubs of retail activity on the Upper East Side—remain less developed north of 96th Street.

But Mr. Pazzaglini contends his converted building on Upper Fifth has the best of Central Park—without the crowds. "Up at the northern end of the park, you have everything the park offers, but have it to yourself," he said.

Write to Laura Kusisto at laura.kusisto@wsj.com

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