Here’s Why High-Net-Worth Individuals Might Choose To Rent Instead Of Buy In NYC

As the Manhattan sales market continues to slow, developers in the area are seeing a growth in the luxury rental space, and are following through by building rental properties that have condo-level amenities and activities that go beyond a wine and cheese hour.

At American Copper Buildings, two 48-story towers in Murray Hill, for example, the outdoor pool has hosted a meditation event, where residents are led through a guided meditation while music plays underwater.

Twenty Broad Street, a new 29-story rental tower that repurposes a New York Stock Exchange building in the Financial District, hosted a golf happy hour for residents.

Gary Malin, the president of Citi Habitats, said some high-net-worth individuals choose to rent, rather than buy, their home, precisely because of the high level of amenities being offered, and because of the flexibility. “Many years ago people felt they were giving up a level of luxury buying afforded them,” Malin says.

Jordan Sachs, chief executive officer and cofounder of Bold New York, which is marketing American Copper Buildings and Twenty Broad Street, said there has been a shift in the sales market at certain price points.

“The market for first-time home buyers is very strong, but if there’s a negative sentiment in the market, it gets people thinking,” Sachs says. “With the incredible offering set in luxury rental space, people will rent and buy houses in Hamptons and upstate.”

With a large influx of inventory, developers have to outperform competing buildings on experience, amenities and quality, Sachs says.

Bruce Sturman, managing director of The Maxal Group, developer of Harbor 1500 in Weehawken, which boasts central air and views of the Manhattan skyline from every apartment and a roof deck with a pool, screening room, barbecue areas, a bar and outdoor showers, says the building delivers a certain product to people who want to be close to New York City but aren’t in the market for a condo or can’t afford $3,000 to $5,000 a square foot in New York City.

“We believe it captures a void,” Sturman says “There’s a segment of the rental market that wants all the accoutrements of ownership. We’ve been condo builders in the past. Market conditions will dictate when you can build a rental product.”

Jackie Urgo, president of The Marketing Directors, which is is leading the leasing efforts at Harbor 1500, says the building is tapping into the changes in the waterfront in Weehawken, with a Whole Foods recently opening across the street, but it’s “50 percent of what you can get across the river in Hudson Yards.”

Renting also allows for a degree of flexibility, Malin says. Buyers can try out living in Manhattan or Brooklyn — or Weehawken.

“People have predetermined ideas of where they want to live,” Malin says. “It’s like dating. You’re not marrying your apartment. If you rent in a condo, maybe you’ll end up loving it.”

Source: Lisa Chamoff, Forbes Magazine

Filed under: Headlines by Alec Reimon
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