What fancy condo? Today, New York is ushering in an era of ultra-luxury rentals, where the pickings are slim and the city has the best properties for sale.
After a decade of high-profile condo developments hoping to attract buyers with sleek designs and amenities, the top end of the city’s real estate market is moving toward rentals of the same caliber.
Cause? ongoing high interest rates and overall economic uncertainty. That said, there will be buyers with deep pockets who still want to wait things out, with luxe options at their disposal.
For example, 111 Charles, a West Village development, is opening on August 1. With a distinctive red sculptural façade designed by architect Morris Adjami, the 19-unit building features one-bedrooms with a minimum rent of around $8,000 and a penthouse. It is being leased for $40,000.
The building’s amenities include a souped-up gym, an airy residents’ lounge complete with a top-of-the-line kitchen, and a playroom for the kids filled with the latest and greatest toys.
There’s also the new Anagram Columbus Circle, with its 13,000-square-foot amenities and four-bedroom units that cost more than $26,000 a month.
Brooklyn isn’t excluded either. One Boerum Place, an all-rental development downtown, has 700-square-foot one-bedrooms for as low as $5,000 and penthouses for up to $30,000.
Brian Ezra, a partner and co-founder of Avery Hall, the real estate development company behind One Boerum Place, says his firm has an even more spectacular rental project in the works, debuting in Gowanus in 2025.
Demand matches prices. Matt Abreu, vice president of development at Aurora Capital Associates, the company behind 111 Charles, says the waiting list for eager tenants is close to 100 people, and Anagram Columbus Circle has a waiting list as well.
Buildings already open, meanwhile, including One Boerum Place and The Cooper in Midtown East, report full occupancy, with more than 760 units. It hasn’t always been like this.
Vicky Baron of Compass says there is a dearth of luxury rentals on the market, and those that are listed are sold out in less than a day — sometimes even within hours.
One of her clients, who requested anonymity, says she’s seen several listings in Lower Manhattan that range in price from $25,000 to $60,000 a month and offer a significant amount of outdoor space.
“They were leased out so fast I never got a chance to bid,” he said. “I haven’t found anything suitable for our family yet, so we’re living in our current apartment in Chelsea.”
The data supports the trend. The most recent rental report from Douglas Elliman and Miller Samuel shows median rents are up again reached another record high Amidst the high demand for living in the city. In addition, 13.5% of the rent in May bidding warsAnd inventories remained well below the decade average for May.
The report’s author, Jonathan Miller, says monthly rental prices at the top end of the market start at $23,000, up from $18,000 five years ago.
“This is definitely a time when luxury rentals are picking up more traction than ever,” he said. “In Brooklyn, for example, the average rent reached a new high for the second straight month.”
This scenario is the opposite of what happened at the beginning of the pandemic When rental prices fell dramatically In view of New Yorkers fleeing the city. According to Miller, rates dropped 20% while vacancies neared 12% — the most since July 2006, the first year they tracked this data.
re leasing prices to begin shafting in 2021 When the COVID vaccine became a reality.
“As soon as a vaccine was distributed, it was almost like a switch was flipped and demand started to rise,” Miller said.
Due to higher interest rates on mortgages than a year ago and uncertainty in the stock market, rentals are attracting the deep-pocketed set.
“People fear we are headed for a recession,” he said.
Douglas Elliman agent Kirsten Jordan agrees.
“Some potential buyers are fearful and don’t want their money tied up,” she said. “The financials of renting make more sense.”
Jordan’s recent client, for example, a single man working in finance, considered buying an apartment that would pay him $24,000 a month — but chose a two-bedroom apartment in SoHo for $18,000.
Real estate experts and developers additionally point to the change in lifestyles since COVID.
Ezra of One Boerum Place says the building was originally designed as a condominium, but was converted to a rental model just before it opened. “When we were finishing up, Covid hit and we found that people wanted rental flexibility, but still wanted a beautiful home,” he said. “We wanted to offer that.”
111 Charles K. Abreu echoed the same sentiment.
“People want freedom when it comes to finding a home without sacrificing luxury and we have taken advantage of that,” he added.
Matt and Kelly, currently renting a three-bedroom at One Boerum Place and only wanting to be identified by their first names, are prime examples. Matt, a lawyer, and Kelly, who works in public relations, relocate from Washington DC to New York in 2022. They didn’t want a long term financial commitment and asked for rent for their new home.
Matt said, “We have seen examples of family and friends who could not resell their homes, and we did not want to be in the same position as our long-term plans are uncertain.”
The building’s facilities, particularly the indoor swimming pool and lounge that Kelly uses when she is working remotely, were a major driver in her decision.
“The facilities are comparable to condos we’ve seen, and we’re so happy with our decision that we signed the lease for another two years,” Kelly said. “There’s a rental way for us to go right now.”