What fancy condo? Today, New York is ushering in the era of ultra-luxury rentals where the pickings are slim and rival the best new for-sale properties in town.
After a decade of much-hyped and buzzed-about condo developments hoping to attract buyers with sleek designs and a bevy of amenities, the top end of the city’s real estate market is gravitating towards rentals of the same caliber instead.
The reasons? Ongoing high interest rates and overall economic uncertainty. That said, deep-pocketed would-be buyers who want to wait things out still have luxe options at their disposal.
Take, for example, 111 Charles, a West Village development debuting on Aug. 1. With a distinctive red sculptural facade designed by architect Morris Adjmi, the 19-unit building has one-bedroom rentals that are a minimum of nearly $8,000 and a penthouse that’s leasing for an eyebrow-raising $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 kids filled with the latest and greatest toys.
There’s also the new Anagram Columbus Circle with its 13,000 square feet of amenities and four-bedroom units that cost upwards of $26,000 a month.
Brooklyn isn’t excluded either. One Boerum Place, an all-rental development downtown, has 700-square-foot one-bedrooms for a minimum of $5,000, and penthouses for up to $30,000.
Brian Ezra, a partner and co-founder of the real estate development company Avery Hall behind One Boerum Place, says his firm has an even more luxurious rental project in the works that debuts in Gowanus in 2025.
Demand matches the prices. Matt Abreu, the vice president of development at Aurora Capital Associates, the company behind 111 Charles, says that the waitlist for eager tenants is close to 100 people, and Anagram Columbus Circle has a waiting list as well.
Already-open buildings, meanwhile, including One Boerum Place and The Cooper in Midtown East, with more than 760 units, report full occupancy. That hasn’t always been the case.
Vickey Barron, of Compass, says there’s a dearth of luxury rentals on the market, and the ones that are listed are snapped up in less than a day — even sometimes within hours.
One of her clients, who requested to remain anonymous, says that he looked at several listings in Lower Manhattan that ranged in price from $25,000 to $60,000 a month and offered a significant amount of outdoor space.
“They were leased so fast that I never had a chance to put in a bid,” he said. “I haven’t been able to find anything suitable for my family yet, so we’re staying out in our current apartment in Chelsea.”
Data supports the trend. Douglas Elliman and Miller Samuel’s most recent rental report shows that median rents have yet again reached another record high amid big demand for city living. Further, 13.5% of rentals in May were bidding wars, and inventory remained well below the decade average for May.
The report’s author, Jonathan Miller, says that monthly rental prices at the top end of the market start at $23,000, a jump from $18,000 five years ago.
“It’s definitely the time when luxury rentals are picking up traction more than ever before,” he said. “In Brooklyn, for example, the median rent reached new highs for the second straight month.”
This scenario is the reverse of what happened at the start of the pandemic when rental prices dropped dramatically in the wake of New Yorkers fleeing the city. According to Miller, rates dropped 20% while vacancy reached close to 12% — the highest since July 2006, the first year he tracked this data.
Leasing prices then began ratcheting up in 2021 when the COVID vaccine became a reality.
“As soon as a vaccine was distributed, it was almost as if a switch was flipped and demand began to soar,” said Miller.
Rentals are attracting the deep-pocketed set, Miller says, because of the higher interest rates on mortgages compared with a year ago and uncertainty in the stock market.
“People are afraid we are going to slide into a recession,” he said.
Douglas Elliman agent Kirsten Jordan agrees.
“Some potential buyers are spooked and don’t want their money tied up,” she said. “The financials of a rental make more sense.”
Jordan’s recent client, for example, a single guy working in finance, considered buying an apartment that would have had him shelling out $24,000 a month — but opted for a two-bedroom apartment in Soho for $18,000 instead.
Real estate experts and developers additionally point to a shift in lifestyles since COVID.
Ezra, of One Boerum Place, says the building was originally planned as a condominium but switched to a rental model just before it was set to open. “COVID hit as we were finishing, and we found that people wanted the flexibility of a rental but still wanted a beautiful home,” he said. “We wanted to offer that.”
111 Charles’ Abreu echoed the same sentiment.
“People want freedom when it came to finding a home without sacrificing luxury, and we capitalized on that,” he said.
Matt and Kelly, a couple currently renting a three-bedroom in One Boerum Place and only wanted to be identified by their first names, are prime examples. Matt, a lawyer, and Kelly, who works in public relations, relocated to New York from Washington DC in 2022. They didn’t want a long-term financial commitment and sought a rental for their new home.
“We have seen instances of family and friends who couldn’t resell their homes, and we didn’t want to be in the same situation given that our long-term plans are uncertain,” said Matt.
The building’s amenities, especially the indoor swimming pool and lounge that Kelly uses when she’s working remotely, were a key driver in their decision.
“The amenities are comparable to the condos we looked at, and we’re so happy with our decision that we signed a lease for another two years,” said Kelly. “A rental for us for right now is the way to go.”