For decades, Columbus Circle was a New York enigma. Despite its proximity to Central Park and high-end commercial and residential neighborhoods, the area was characterized by undeveloped lots and unfulfilled potential.

That started to change 10 years ago, and today new apartment, office, and retail projects mark a celebration of radical changes in the neighborhood. The rebound follows the momentum of the Time Warner Center, which experts say has had a bigger positive impact on its surrounding area than virtually any New York development.

The celebration commenced in 1997, when the joint venture of General Electric Pension Trust, the Galbreath Co., and Donald Trump completed a gut renovation of the 45-story Gulf & Western office building (built in 1969) and transformed it into a 52-story hotel and residential tower. It now houses 168 hotel suites below the 23rd floor, and 168 apartments with breathtaking park views.

Fast-forward to February 4, 2004, the official opening of the Time Warner Center, replacing the blighted New York Coliseum. The complex houses the 879,000-square-foot headquarters of Time Warner, 211,000 square feet of office space known as 60 Columbus Circle, 191 luxury condominiums, a 504-car parking garage, Jazz at Lincoln Center, a 40,000-square-foot Equinox health club, the 347,000-square-foot retail space called the Shops at Columbus Circle, the 251-room Mandarin Oriental Hotel, and top restaurants.

The chairman of Metropolitan Valuation Services, Martin Levine, said that because of the area’s central location and access to mass transit, the sharp rise in property values is overdue. “For years it languished while the coliseum stood underutilized and then empty. Not even the Lincoln Center complex to the north could generate the necessary momentum to bolster investment in the community.”

“It took a mammoth project like the Time Warner Center, riding the storm surge of perfect market conditions to create the synergy only a large development can create. The center can be seen as the catalyst for the redevelopment of Columbus Circle/Lincoln Center and development, investor interest and demand in the area,” he said.

The president of Swig Equities, Kent Swig, said the Time Warner Center “has had the greatest influence in changing any area in the past 20 years. It has actually made Columbus Circle a circle, and brought residential, retail, and hospitality. Today, the region on West 57th Street and Eighth Avenue is a better location than at West 57th Street and Avenue of the Americas.”

The president of YL Real Estate Developers, Yair Levy, said the Time Warner Center “has revitalized a tired neighborhood by creating a destination point that is vital and vibrant for the Midtown South business and residential district, adding new life and energy.”

A real estate partner at Stroock & Stroock & Lavan, Ross Moskowitz, said the Time Warner Center is responsible for launching a new core business district. “A perfect example of the evolution is 2 Columbus Circle, which sits in the center of this new district. Vacant since 1998, it is the future home of the Museum of Arts & Design and scheduled to open in 2008. Through the creation of more than 54,000 square feet of exhibition and retail space, 2 Columbus Circle will be transformed into a state-of-the-art destination museum, demonstrating the crucial role that the arts play in the economic vitality of the neighborhood,” he said.

In April 2005, a joint venture of Swig Equities, YL Real Estate Developers, and Serge Hoyda purchased the Sheffield, an 845-unit residential rental tower, for $418 million. The tower, adjacent to the Hearst Tower between Eighth and Ninth avenues, is in the process of a total renovation and will become condominium apartments. Later this year, the first owners will be move in and the developer says about 15% of the units have been sold, with prices averaging $1,500 a square foot.

In the spring, the Hearst Corp. will be closing on the purchase of the retail, garage, and office component of the Sheffield. It is paying $95 million for the 372 parking spaces in a below-grade garage, first-floor retail, and 110,000 square feet of office space on the second through the fourth floors.

Another red-letter date in the neighborhood’s revitalization is October 9 of last year, the official opening date of the new Hearst Tower. The 46-story glass and steel headquarters rises 697 feet from within the company’s landmark six-story base on Eighth Avenue between 56th and 57th streets.

On or about March 21, the celebration will continue with the opening of 6 Columbus Circle, a 90-room suite hotel directly across the street from the Time Warner Center, a product of a joint venture of Real Estate Investors and Thompson Hotels. “Our hotel is in the new center of gravity, the epicenter of New York,” a principal at Thompson Hotel, Michael Pomeranc, said.

“The Time Warner Center, and its retail, anchors the renaissance much more dramatically than expected for this bastion of Manhattan. The aftereffects are stronger than the center because of the rebirth of the lower southwest edge of Central Park,” he said.

Industry leaders are now considering this neighborhood the press and broadcast center of New York. Companies such as Time Warner, Hearst Corp., Random House, and Newsweek are within a short walking distance of Columbus Circle.

The president of W&M Properties, Anthony Malkin, said the market is vibrant and maturing. “Many building ownerships have changed, new developments have been completed, yet some owners have held their properties, upgrading them to meet the new demand,” he said. W&M owns 250 W. 57th St., between Broadway and Eighth Avenue.

Much of the area’s office space was formerly occupied by small theater agents, accountants, and music producers involved in Broadway or film production, but the nature of the tenants is changing, according to Mr. Malkin. “The tenancy in the buildings has changed, with 95% occupancy and few tenants taking larger spaces,” he said.

Before the end of the year, the joint venture of Zeckendorf Development LLC, Global Holdings, and Goldman Sachs Whitehall Fund will welcome the first residents of 15 Central Park West, the development between Central Park West and Broadway and 61st and 62nd streets. The project consists of a 20-story building along Central Park West and a 43-story mid-block tower with a five-story base along Broadway.

Within the luxury condominium at 15 Central Park West is the retail portion of the property, called the Retail at 1880 Broadway. The retail space comprises about 85,000 square feet owned by Zeckendorf Development LLC, Goldman Sachs Whitehall Fund, Global Holdings, and Madison Capital. Last year, Madison Capital, a private real estate investment and development company, purchased an interest in the retail condominium.

“The Broadway block where 15 CPW now rises was for several decades a brick-strewn vacant lot, a New York enigma,” the executive director of retail services at Cushman & Wakefield, Gene Spiegelman, said. “It broke the streetscape and added to the blight of the vacant and rotting New York Coliseum.

“Those days are now long gone,” Mr. Spiegelman said. “We took the position that the Broadway retail portion of the property was the final piece of the puzzle linking Columbus Circle, Lincoln Square, and 72nd and Broadway — the nexus of the Upper West Side.”

The major retail tenant at the Retail at 1880 is Best Buy. Mr. Spiegelman said the remaining 39,000 square feet would go to “lifestyle retailers similar to Best Buy in the home, specialty retail, and apparel categories.” Industry sources confirmed that the owners of the property declined to rent the vacant space to Staples.

INVESTMENT SALES

A large amount of real estate in the area is changing hands, as investors are predicting bigger gains and some owners are cashing out. According to the a report in Commercial Mortgage Alert, Credit Suisse has agreed to provide a $240 million loan to Istithmar holding company to finance its acquisition of the 73% majority stake in the Mandarin Oriental at the Time Warner Center.

In January, RCG Longview, a fund operated by the Fiel Organization and Ramius Capital, purchased the majority stake in the 173,000-square-foot office building at 200 W. 57th St., on Seventh Avenue across from Carnegie Hall. According to real estate sources, the purchase price was about $135.5 million, or $783 a square foot.

Last October, BlackRock Realty Advisors purchased a 98% interest in the 260,000-square-foot office, retail, and garage component of the 78-story Metropolitan Tower at 142 W. 57th St. It paid $196 million to Principal Global and L&L Acquisition, which continue to own a 2% stake in the property.

In November, the Witkoff Group purchased the 675,000-square-foot office condominium that occupies 24 floors at 1745 Broadway, a mixed-use building that stretches between 55th and 56th streets on Broadway. It paid $509 million, or $754 a square foot. The building was completed in 2001 by the Related Cos.; it has 90,000 square feet of retail and 25 floors of residential condominiums.

With the office vacancy rate hovering around a record low, two new commercial buildings are planned for Eighth Avenue, near Columbus Circle. Later this year, a joint venture of Boston Properties and Madison Equities is expected to begin construction of an 850,000-square-foot office building on the entire east block front of Eighth Avenue between 54th and 55th streets. Farther south, a joint venture of SJP Properties and Prudential Insurance is scheduled to begin construction this spring on a 40-story tower at the southeast corner of Eighth Avenue and 42nd Street.

RESIDENTIAL

Residential rental and condominium apartments are in various stages of development. A few years ago, the Durst Organization completed the 40-story, 600,000-square-foot 80/20 residential rental apartment building with 597 units, at 601 W. 57th St.

Directly across the street, AvalonBay Communities has entered into a lease to construct a residential rental building on West 57th Street between Eleventh and Twelfth avenues. The project has to go through the Uniform Land Use Review Process for a zoning change to residential.

Other residential projects include: Alchemy Properties’s 60-unit condominium less than two blocks from the Time Warner Center, at 460 W. 58th St. off Tenth Avenue; Apollo Real Estate Advisors’s development at 10 West End Ave. near 59th Street known as the Element Condominium; Atlantic Development’s rental at 33 West End Ave.; the mixed-use Hudson Condominium at 225 W. 60th St., which also houses the Lander College for Women of Touro College; Clarett Cos. and Vornado’s condominium tower at 220 Central Park South; Extell’s condominium towers on West 57th Street, and Douglaston Development’s proposed condominiums on the campus of Fordham University at Lincoln Center.

Mr. Stoler, a contributing editor to The New York Sun, is a television broadcaster and a senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.