Upper West Side’s Former Calhoun School Sells for $26.4 Million, Shelter Plans Unchanged

As New York City’s shelter crisis grinds on, a once-modest schoolhouse deal on the Upper West Side sharpens the debate over property markets, public contracts, and the price of pragmatism.

At a glance, the red-brick facade of 160 West 74th Street betrays little: just another prim, institutional edifice among the storied blocks flanked by Columbus and Amsterdam avenues. Yet its all-too-ordinary exterior belies a transaction that typifies the muddled, high-stakes improvisation of social policy and property speculation in New York. Over two short years, this former Calhoun School building has doubled in price—selling in late June for $26.4 million, barely 16 months after it fetched just $14 million. In a city where shelter beds and luxury condos jostle for space, the back-and-forth is instructive.

The five-story, 16,267-square-foot property will soon house not tuition-paying pupils but up to 146 women seeking refuge from the streets. Volunteers of America, a prominent city contractor—whose own financial chief, Michael Solana, has recently been feted as a “Crain’s 40 Under 40” honoree—will operate the shelter through at least its opening season (now delayed past the original autumn 2024 target). The latest owner, Apex Investments—led by Kasra Sanandaji—secured the asset from Bayrock Capital, whose five-month holding period yielded a windfall that any hedge fund manager might envy.

Municipal involvement crystallised last year, when City Hall’s escalating shelter crisis obliged the Department of Social Services to hunt for additional beds, fast. The local nonprofit stepped in, provided operational continuity, and reportedly signed an updated lease as the building changed hands. All the while, plans were filed to expand the structure into six stories, ensuring that every inch would be swept into the city’s ceaseless struggle to keep pace with demand.

On paper, this is a tidy solution—a vacant building redirected to urgent public need, a contract awarded, a site repurposed. Yet the details are telling. The sale price—up more than 88% with little in the way of new construction or sweat equity—suggests a marketplace keenly attuned to the upward pressure of public guarantees. In New York’s perennially overheated real estate sector, few things buoy value like a city contract inked in haste.

To proponents, such deals are pragmatic, even efficient: un- or underused properties pressed into service during a moment of acute need. To critics, however, they hint at opportunism and a revolving door between speculative capital and government largesse. The rapid flip of 160 West 74th Street may stoke arguments that New York, with its $107 billion annual budget, can ill afford to act as a price-insensitive purchaser—even by proxy. When city contracts chase private assets, competition all too often begets inflation.

How the transaction will ultimately impact the Upper West Side—the locus of some of the city’s most restive battles over housing policy—remains to be seen. Local residents, already vocal over security and services when homeless shelters open, may now question not just the operations, but also the economics underpinning them. The real estate windfall for the seller—with the difference pocketed before a single client checks in—may well sharpen already fraught debates over “fair share” neighbourhood responsibilities.

Yet it would be simplistic to lay blame for New York’s shelter premiums solely at the feet of investors. The city’s own bureaucracy, notoriously slow-footed and risk-averse, struggles to negotiate at arm’s length in a market where time is money. Contracts favour certainty—leading nonprofits and their landlords, understandably, to load up on contingency pricing. This Gordian knot of politics, expedience, and cut-throat bidding leaves little room for sober price discovery.

The broader context is suitably grim. With the city’s shelter population now exceeding 80,000, driven by a perfect storm of housing unaffordability, stagnant wages, and the recent arrival of tens of thousands of asylum seekers, once-marginal facilities are being pressed into service. Nationally, other metropolises—from Los Angeles to London—have likewise resorted to repurposing churches, hotels, or repurchased social infrastructure. Invariably, each wave ignites its own cycle of speculation and public outrage.

A shadow over social contracts

For New Yorkers, the sale of 160 West 74th Street portends more than just another facility. It signals that shelter provision—intended as a public good—has become yet another high-yield asset amid a surging urban property market. Large, accessible Manhattan sites are scarce; needs multiply; city procurement remains both essential and capricious. Politicians, meanwhile, are left juggling the optics of compassion against fiscal restraint—while developers, brokers, and contract lawyers all take their slice.

Longer-term, such patterns bode ill for efforts to rein in costs. The volatility of shelter procurement pricing piles onto a city budget already groaning under health, education, and policing outlays. Efficiency-minded reforms—say, city acquisition of distressed properties or streamlined approval procedures—have so far proven elusive, stymied by community opposition and risk aversion at every level.

A more global lens reveals an irony not lost on New Yorkers: the world’s wealthiest, most dynamic cities are often those most beset by the twin plagues of housing inflation and visible poverty. Where public need collides with private capital, outcomes trend toward the suboptimal unless governments can act swiftly, transparently, and—above all—predictably. This transaction is one small marker of a much larger dilemma.

We reckon that, absent stronger oversight and a more nimble strategy for procurement, New York will remain an exceedingly expensive place to confront acute social need. The revolving-door dynamic, in which city contracts spur price surges, is not inevitable; it is, however, the result of policies that prize deal flow above discipline. Until that changes, buyers like Apex and sellers like Bayrock will continue to ply their profitable trade along the seam between public necessity and private interest.

Public investment in shelter is not misplaced. But when speculative profits rival those of a penthouse flip, taxpayers may reasonably ask whether value is truly being delivered. In the city that never sleeps, one suspects that neither real estate speculators nor city auditors will rest easy anytime soon. ■