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Whole Foods Becomes a Selling Point for Harlem Real Estate

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By Yi Lu

Green posters at Harlem’s first Whole Foods supermarket, on West 125th Street, announce that it will open in early 2017, as passersby curiously peer through its glass doors.

Even before it starts selling organic produce, however, local brokers say the store has already boosted real estate prices.

“Since 2012, when the chain announced its Harlem location, residential rents increased 20 percent to 25 percent,” said John McGuinness, president of Harlem Properties, a real estate company that has focused on Harlem since 2013. “The sales prices increased immediately after Whole Foods’s announcement.” Rents, he said would show more effect after the store opens.

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John McGuinness, president of Harlem Properties, in front of his real estate company.

McGuinness used a one-bedroom apartment 10 blocks from Whole Foods as an example. “The average monthly rent now is about $2,600,” said McGuinness. “It’s reasonable to ask 25 percent more next year after Whole Foods opens.”

The first anchor tenant in a retail and restaurants complex, Whole Foods has brought more businesses, like American Eagle and Olive Garden to the neighborhood, McGuinness added. He sees both residential rents and sale prices rising over the next five years.

Harlem’s increasing real estate values are one reason that McGuinness launched his business in 2013. “If you commute to Wall Street, it’s faster for you to commute from 125th Street in Harlem than if you live on 79th Street and Broadway.”

“We have used Whole Foods as one of the sales point since its announcement in 2012,” said Sam Kiernan, a salesperson at Bohemia Realty group on West 114th Street. “We tell our customers that Whole Foods is opening soon.”

According to the Upper Manhattan Real Estate Report of Harlem Lofts, a real estate company, the upper Manhattan real estate market grew faster than any other Manhattan’s neighborhood. The average townhouse sale price jumped 54 percent from 2013 to 2015, and prices are still rising rapidly. A townhouse in Harlem last year cost, on average, $625 per square foot.

In Harlem Loft’s rental report, the average 2015 rent for a one-bedroom apartment in Harlem was $2,123; two bedrooms went for $2,792, and a three-bedrooms was $3,484.

Lance Matthews, 50, is preparing to become a Harlem property owner. “I am planning to buy this house,” said Matthews at an October open house on West 119th Street. The five-story, 5,700 square foot brownstone has 18 rooms. Its asking price was $4.351 million and “it’s worth every penny,” Matthews said.

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Lance Matthews at an open house on West 119th Street

 “I noticed that the Whole Foods is there, down the street,” said Matthews, CEO of Fashion News Network. “It changes the demographics, changes the structure of the neighborhood, and it also bring other businesses here.” Manhattan has little space to grow, he added, but Harlem does. “Harlem gives 50 percent off for this type of house, compared to anywhere else in Manhattan.”

“When Whole Foods announced its coming, it’s just like Bill Clinton announced launching his office here,” said Robb Pair, president and founder of Harlem Loft. “Whole Foods has spent huge money on market research, and it will only choose upcoming markets.”

Other national retailers who spend less on market research can just watch Whole Foods’s movements and feel secure about following Whole Foods’ lead, he said. “Whole Foods is a game changer.”

Local residents worry about being displaced, however. Rezoning and affordable housing issues dominated East Harlem’s most recent Community Board 11’s meeting.

There are “lots of families in Harlem whose monthly income is below $3,000,” said Marina Ortiz, 38, an East Harlem native and cofounder of East Harlem Preservation. When the city planning department presented early ideas about rezoning at the meeting, “they mentioned nothing about the affordable housing plan.”

(Photos by Yi Lu)