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Dorothy Somekh

Lic. Assoc. R.E. Broker
Office:(212) 381-2265
Mobile:(917) 299-6670

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Jewish Voice

NYC S Ultra Luxury Rentals Are Dropping In Price

Luxury apartments are dropping in price. Robby Browne of the Corcoran Group found this out the hard way when he had to drop the price of the two-bedroom condo at 15 Central Park West which he owned that he was typically able to rent out for $18,500 a month. According to him, whenever a lease was about to expire, tenants and agents would be clamoring to rent the apartment, and he never had a problem finding someone new to move in. Now, with the current real estate market, he not only had to refurbish the apartment, but he had to drop the rent down to $16,250 a month. As he put it, “I thought, ‘Be sensible, Robby, the rental market is down. Put it on at a price that will work. I don’t like missing a month.”

After a huge increase in rented condos that led many investors to become landlords, there’s now a huge quantity of extremely high priced condo units available on the open market. Tenants are finding themselves able to get sweet deals in terms of rent thanks to downturns in the real estate market, where landlords are finding themselves having to drop rents to find tenants. Since 2015, the high-end rental market decreased 10%-15% according to Robby Browne. One of the landlord clients that Browne was working with has had to drop rents for a two-bedroom condo at 40 East 66th Street from typically $19,000 to $20,000 a month to $18,000. Deals are taking longer to be reached as well. Tal Alexander, who works with Douglas Elliman has had to use “light staging” for a rental going for $20,000 at One 57. Even so, it still took two months to rent out. Alexander has been telling clients to keep rents low if they hope to find renters. He states, “If [renters] see the apartment linger, they think it’s more negotiable.”

According to Dorothy Somekh, who works with Halstead Property, the real estate market will remain “soft” until apartments currently without renters are finally rented out. She states, “The people who are going to rent [to tenants] are the ones that are going to make adjustments quickly.” Renters who recognize that lowered rents are the way to go will have more success in renting out their apartments. This was confirmed by Jordan Sachs with Bold New York. He stays, “Our clients on the rental market are getting 20 percent off on some of these apartments. You’re dealing directly with an owner, not a professional landlord. All he wants is cash flow, and every day the apartment sits vacant is affecting his return on investment.”

One can find a plethora of expensive condos and other rentals in places like Tribecca and Chelsea in Manhattan which have long been attractive to real estate developers. But with the closure of many new developments just in the last year, these same rentals are now on the open market. As Jordan Sachs put it, “We’re seeing a flood of apartments $40,000 and higher.” Actress Jennifer Lawrence’s three-bedroom condo, purchased this year at 443 Greenwich, has been listed as looking for tenants. It currently has an asking price of $27,500 a month

Wednesday, June 14, 2017