Apartment rentals New York with Luxury Manhattan Apartments

In the Manhattan rental market in 2011, demand for rental apartments far outstripped supply. Both developers and lenders recognized that this pent-up demand made for ideal building conditions, which is why $2.9 billion worth of new residential projects began in New York City in 2011. That’s a 24% increase from 2010 according to data released by the New York Building Congress. Additionally, Manhattan’s slew of stalled construction sites - land controlled by developers who have obtained all the necessary construction permits yet have still halted work - has finally begun to shrink. According to the New York City Department of Buildings, Manhattan had 130 stalled construction sites at this time last year, and now that number has fallen to 114. Furthermore, the number of demolition permits issued in Manhattan rose from 2010 to 2011, so more developers are waiting to break ground. So all this new construction should alleviate demand in the near future, right? Not exactly. While this is undoubtedly a step in the right direction, it still falls well short of the kind of progress that would help bring down rental prices in Manhattan. If there’s a lesson to be learned from 2011, it’s that even rising inventory won’t slow down the Manhattan rental market, so we at Luxury Rentals Manhattan don’t expect rents to begin to fall in 2012.

The December 2011 rental market report showed that prices for luxury Manhattan rentals were considerably higher than they had been the year before. Experts said this indicated how much the real estate market had recovered from the 2007 market crash, but most agreed it was abetted by a particularly scarce rental inventory. And while rental availability always ebbs and flows, the Wall Street Journal is reporting that new rental buildings could literally run out of space. Manhattan neighborhoods are running out of areas currently zoned for residential construction.

In an unexpected twist, Related Cos. elected to switch the luxury condos in MiMa, their 63-story glass high-rise on 42nd Street and 10th Avenue in Midtown West, to luxury rentals. Related planned for over 3 years to sell the 151 units as luxury condos, all located above the 50th floor of MiMa. The 663 luxury rentals on the lower stories were always been designated as rentals, but this sudden reversal to an all-rental building rather than a mixed sales and rentals building is more telling than it appears, though not in the way we might initially assume. This is not a case of desperate landlords panicking and using the luxury rental market as a safety net. Rather, this is a calculated decision based on the strengths and weaknesses of the rental and sales markets. If Related is making a smart decision, and it certainly appears that way, then MiMa's move to rental bodes well for the luxury rental market in Manhattan.

It seems like we’re writing about new residential development projects in Manhattan every day, but commercial developments have become something of a lost art. Commercial buildings are less lucrative financially than residential buildings, where New York City’s constantly growing population keeps them in high demand. Most developers don’t want to risk leasing space to commercial industries, so today we are happy to report on a new project to build the area north of Madison Square Park into a commercial district called NoMad.

With Chelsea and the Flatiron District to the West and South, respectively, the area surrounding Madison Park is one of the most developed places in Manhattan, filled to the brim with high-end luxury condos for sale and apartments for rent. But the NoMad area itself remains relatively empty. It was a major area for bootlegged merchandise until recently, when developers saw the potential in turning it into an upscale commercial area. To encourage development, a couple savvy property owners lowered the rent for commercial buildings. Now they’re watching eagerly as potential culture-makers start nibbling at the bait. The new Museum of Mathematics, which opens next year, just recently leased space on 26th Street, and other projects are falling in line.

Much has been made of the consistent rise in Manhattan rents in the face of adversity. In the midst of economic woes, the Manhattan luxury real estate world has prided itself on the steady rise of rental prices: the average monthly rent in Manhattan is up 8% from this time last year and is just $53 off the all-time market peak set in 2007. In spite of this remarkable success, many real estate experts view this trend in luxury rentals in Manhattan as unsustainable. With the market slowdown of winter approaching, signs are beginning to point to rents either remaining stable or declining for the first time since 2009.