New York City Luxury Rental Blog

Nothing in recent Manhattan history has spurred development like Hudson Yards in Midtown West is now. Since 2005, the one-time site of Mayor Bloomberg’s failed Olympics bid has seen the construction of 15 Manhattan luxury condo buildings and 12 hotels. News about development projects in the area are released every day it seems, and every real estate insider projects that development will skyrocket in the Far West Side over the next several years. Even building projects not directly inside the Hudson Yards boundaries have the area to thank for their existence. Gotham West, a massive construction project that will take up an entire block, is one such building. From 44^th to 45^th Street and Tenth to Eleventh Avenue, Gotham West is a four-tower rental and condo hybrid that plans to offer 1,263 housing units, 556 of which will be apartments for rent.

Everyone knows that living in Manhattan is expensive, especially when renting an apartment. While this is true in general, there are exceptions to the rule. Manhattan Valley, an unassuming, quiet neighborhood with a convenient location situated between 100th and 110th Street and bounded by Broadway and Central Park West, has many rental apartments available for prices far below the norm for Manhattan and the neighboring Upper West Side. This neighborhood has had trouble garnering attention among renters of luxury apartments in Manhattan, but that doesn’t mean that it doesn’t deserve recognition. Manhattan Valley is something of a throwback: A community oriented neighborhood that hasn’t undergone the kind of gentrification that homogenizes neighborhoods and destroys their character. As such, this unique area has some of the best deals in Manhattan, especially considering that many of the rental apartments are condo-quality. And for families or young professionals who don’t mind having roommates, the prices for 2-bedroom and 3-bedroom apartments are astoundingly low.

As we’ve written about before, West Chelsea is as hot a neighborhood as anyplace in Manhattan, largely because the High Line has exponentially increased its popularity. Ten23 is one of many newly constructed luxury condo buildings in West Chelsea, but unlike most of its competitors, it sits on top of the Highline, literally. Well, maybe not quite literally, but Ten23’s exterior brushes the Highline’s railing; it basically leans over the park, so passersby can look right into the building. Ten23 has actually used this as it’s best marketing tool. Relying solely on word of mouth, Equity Residential has signed 19 leases and has 5 commitments for the luxury building’s 111 units. What makes this especially remarkable is that Equity has asked all these renters for what is likely the most expensive nonrefundable deposit in Manhattan’s history; just to make a commitment, renters must pony up $1,000 that they know they won’t get back. If this doesn’t speak to the unprecedented strength of the Manhattan luxury rental market (especially in West Chelsea), then we don’t know what does.

In honor of the new year the Real Deal solicited a group of real estate experts and industry insiders to get their opinions on where the Manhattan rental real estate market is headed in 2012. The experts agreed almost unanimously that conditions will be similar to how they were in 2011. Apartments for rent, they said, will still be in the grip of a strong market, and ultraluxury rental apartments will do particularly well. There was general consensus that average rent will either stay the same, or increase slightly over the year. Many experts said that high and stable rents will force condo and co-op prices upward, and most agreed that the rental market would overall be steadier than the purchase market.

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.