“I cannot believe that 50 years ago, your grandparents strived to move from the Lower East Side to the suburbs,” said the parents of a 27-year-old investment banker who recently signed a lease at Avalon Chrystie Place at 229 Chrystie St. on the Lower East Side. The investment banker’s $5,100 rent for a two-bedroom, two-bath, 1,100-square-foot apartment is 25% higher than rent for a new apartment in the Financial District in Lower Manhattan.

This month, the first tenants moved into Avalon Chrystie Place, a mixed-use apartment building on a former parking lot that occupies the entire south side of East Houston Street between Chrystie Street and the Bowery. It’s 80% owned by the New York State Common Retirement Fund, and the balance is held by AvalonBay Communities, one of the nation’s largest apartment REITs and the developer and manager of the building.

It’s the first of four rental towers under development by AvalonBay. It has 361 units, of which 72 are reserved for affordable rentals. The $150 million project, which was financed by $117 million in New York State Housing Finance bonds, will house a 75,000-square-foot duplex Whole Foods market, the chain’s largest in the Northeast. Whole Foods is expected to spend more than $20 million to configure its space, which will include a variety of restaurants. It also has a 40,000-square -foot community center, which will be jointly owned and operated by University Settlement Services and the YMCA of Greater New York.

Only a few months ago, landlords were willing to give tenants concessions of one to two months’ rent. Tenants signing leases at Avalon Chrystie receive no concession and are paying annual rents of $56 a square foot. Monthly rents range from $2,300 for a 494-square-foot studio and $3,400 for a 700-square-foot one-bedroom to $4,395 to $5,600 for an 1,190-squarefoot, two-bedroom, two-bath unit. Rents can increase if the apartment has an interior-to-exterior terrace. There are extra charges for use of storage and exercise facilities.

Tenants have easy access to the F and V lines and views uptown on Second Avenue and the Bowery.

AvalonBay will be developing three other buildings across from the 14-story tower over the next two years. Construction is under way on the second 80/20 tower, which will have 206 units. A third 80/20 rental building with 96 units will open in 2007, and a six-story, totally affordable rental building with 41 units should open in 2006.

In the four-building complex, 177 of the 708 apartments – 25% of the total units – are reserved for households earning up to 60% of the area median income: $37,680 for a family of four.

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People are flocking to Lower Manhattan, as evidenced by the success of new residential buildings, hotels, bars, and restaurants. A few years ago, Sam Chang’s MCSAM Hotels opened the first Howard Johnson on Houston Street. Last year, the 21-story Hotel on Rivington finally opened. Construction has begun on the Pomeranc family’s new 24-story, mixed-use Thompson Hotel and condominium on Orchard and Allen streets. The eight-story, 22-room Blue Room Hotel is scheduled to open a few blocks away in a former tenement at 100 Orchard St., across the street from the Tenement Museum. By the end of the year, Richard Born and Ira Drukier’s 140-room boutique hotel will open on Bowery and Third Street.

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Tomorrow, after 40 years in business, Klein’s of Monticello will close its doors at 105 Orchard St. At the end of August, the legendary night club CBGB will close on the Bowery. Residential condos are being built on top of Luna Lounge at 171 Ludlow St. Residential condominiums and rental buildings are replacing parking lots and gasoline stations. Later this year, the parking lot across the street from Katz’s Delicatessen on Houston Street will make way for an 80/20 residential rental tower.

Sales offices have opened at the 32-unit condominium development at 154 Attorney St., as well as at the seven-story, nine-unit building at 109 Norfolk St., the renovated four-unit building at 115 Allen St., and the 11-story, 16-unit building at 7 Essex St. Renovations of existing four-story buildings are under way on the Bowery, Houston, Orchard, and Rivington, which will provide at least 400 condominium units.

Clothing stores, restaurants, and shops on Orchard, Allen, and Rivington streets have been replaced by upscale lounges and restaurants, and Starbucks is expected to open a branch at 142 Henry St. A former Hebrew school on Rivington Street has been renovated into rental apartments.

The once-blighted Lower East Side and Bowery is thriving, as is most of Manhattan. As Jerry Speyer, the chairman of Tishman Speyer, said a few months ago, “There are no bad neighborhoods in Manhattan.” One thing is certain: The Lower East Side is chic and will continue to grow.

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The Avalon Chrystie Place’s 3-acre parcel cost about $90 a developable square foot. In less than two years, the price of land in the neighborhood has more than doubled. Construction costs have risen at least 25% over the past 12 months. It is impossible for a builder who is acquiring land today at prices in excess of $250 a developable square foot to build rental properties. Over the next 12 to 18 months, more than 10,000 new residential units will be built and available on the metropolitan New York marketplace. The Lower East Side is a neighborhood in transition and is chic for young urban professionals, yet the area lacks schools and other amenities.

The Lower East Side, Williamsburg, and Greenpoint are becoming the SoHos of the 21st century. Few people remember that it was only a quarter of a century ago when most people questioned the wisdom of Tony Goldman of Goldman Properties when he began to renovate SoHo buildings. Everyone wants to live and work in Manhattan, and the Lower East Side is an area in transition gaining in popularity.

Mr. Stoler is a television broadcaster and vice president at First American Title Insurance Company of New York. He can be reached at mstoler@firstam.com.