NYC Real Estate
Luring Affluent Renters in Manhattan
Sign In to E-Mail or Save This Print Single Page Reprints Share
DiggFacebookMixxYahoo! BuzzPermalink
By VIVIAN S. TOY
Published: June 29, 2008
ONE month’s free rent. Two months’ free rent. No security deposit.
Skip to next paragraph
Enlarge This Image
Tony Cenicola/The New York Times
Photographs by Andrea Mohin/The New York Times
WHAT YOU CAN GET Many buildings in Manhattan are offering free rent. Other perks landlords are paying for include, from top, at 188 Ludlow on the Lower East Side, the broker’s fee, moving expenses and a year of free storage; at the Archstone Clinton in Clinton, a three-month gym membership; at Dwell in the financial district, the broker’s fee; and at 20 Exchange Place in the financial district, the broker’s fee (and forgoing the security deposit).
How about a year’s worth of storage at Manhattan Mini Storage or an appointment at a doggie day spa for Rover on moving day?
As the rental market in Manhattan has softened in recent months, these are some of the incentives that owners of high-end buildings are offering to lure tenants. The more elaborate enticements tend to be in new buildings that landlords are trying to fill as quickly as possible, but even owners of some established buildings are offering incentives to avoid having apartments go vacant.
“We definitely have seen a shift in the dynamic of the marketplace,” said David J. Wine, a vice chairman at the Related Companies, which owns and manages about 5,000 rental units in New York City. “The frenzy of a year or two ago has abated, and we’re seeing renters be a lot more thoughtful in their rental decisions.”
Landlords have adjusted accordingly.
“A lot of landlords were getting ready to increase rents for the busy season, but they’re finding that those projected rents aren’t attainable,” said Daniel Baum, the chief operating officer at the Real Estate Group New York, a Manhattan brokerage. “No one anticipated having problems on the rental side, and it’s definitely forcing property owners to take a second look at marketing and to rethink their pricing.”
Market-rate rents have continued to rise, but the rate of growth is nowhere near the double-digit increases that landlords got in recent years. Brokers and building owners say that the troubled financial markets and layoffs on Wall Street probably led to the slow start of the rental season in April. Volume had increased by late May, but professionals in leasing offices say that the incentives being offered in the prime summer rental season are a clear sign of a weaker rental market. (Rents in the city’s one million rent-stabilized apartments, regulated by government and not the market, this year will be allowed to increase by up to 4.5 percent on one-year leases and 8.5 percent on two-year leases.)
Market-rate rental buildings offering incentives tend to be clustered in specific neighborhoods, including the financial district, Harlem, Washington Heights and areas in the far eastern or western edges of Manhattan.
“If a neighborhood is far from the subway or if there is some kind of negative, then that’s where the owners are going to want to do something to make it more attractive to renters,” said Gary Malin, the president of Citi Habitats.
At 20 Exchange Place, a 57-story bank building in the financial district that is being converted into rental apartments, the owner is offering to pay brokers’ fees, giving one month’s free rent and agreeing to forgo a security deposit. The building is also offering the free day at the downtown pet emporium, the Salty Paw, to help make moving day as stress free as possible for pets and their owners. Tenants began moving in earlier this month.
Jack Berman, a vice president at Metro Loft Management, the building’s owner, developer and manager, said the incentives seemed like a good tactic. “The market’s a little bit softer than it was this time last year,” he said, “and we wanted to hit the ground running. There are other competing buildings as well, and we have to play along.”
For Mackenzie Rosenthal, who will be a senior at New York University next year and who will be moving into a one-bedroom at 20 Exchange Place this summer, “the perks were just kind of too good to pass up.” She said she and her father had “pored over the lease, saying: ‘Where’s the catch?’ but as far as we can tell, there doesn’t seem to be one.”
When she and a roommate moved into her current two-bedroom walk-up in the East Village, they had to come up with $12,000 to cover the broker’s fee, security deposit and first and last month’s rent. “That was just ludicrous,” she said. “But when I move into my new apartment, all I need is the first month’s rent.”
Ms. Rosenthal said that after factoring in the free month’s rent, her $3,000 apartment will cost her $2,750 a month. She worries that she will not be able to afford to stay in the apartment when her one-year lease is up, but her broker, Jeffrey Carlson of Platinum Properties, said that as an original tenant, she might be able to negotiate the same rate at renewal time.
