Kreth Communications Real Estate Marketing & Public Relations Call 201-417-8691 for real estate marketing

Real Estate Marketing and Public Relations

Skyline Icon
Contact Kreth Communications
Kreth News

Syndicate this blog XML
RSS 0.92: Posts
RSS 1.0: Posts
RSS 2.0: Posts
Atom: Posts
Select blog: [] [Kreth News]
Kreth News


06:09:52 pm Permalink Rentals Get Their Day, The Real Deal, Miron Properties   English (US)
Categories: Kreth News, 2215 words

Jeff from Miron Properties is quoted:

Rentals get their day
Unlike their condo counterparts, these new buildings are getting more upscale – not less
November 01, 2010 07:00AM

By Candace Taylor

From left: 80 DeKalb in Brooklyn and the Ashley at 400 West 63rd StreetAfter years in the shadow of the condo market, new development rentals are finally having their day.

While the new condo market has just begun a slow, painful recovery from the downturn, new development rentals have experienced a dramatic -- and surprisingly speedy -- rebound, experts say. In part, the turnaround has been spurred by wealthy New Yorkers choosing to rent rather than buy in a still-tenuous economy and tight mortgage market.

Whatever the reason, rents at high-end buildings -- which dipped during the downturn --have bounced back, and some projects are fetching higher rents than ever before.

"It was a very dramatic turnaround in the rental marketplace this year," said Gary Malin, president of Citi Habitats, noting that the firm rented over 200 apartments in new developments in only three weeks this summer. "If you polled most owners a year ago, they wouldn't have known that it would turn around as quickly as it did."

And while condo developers have revamped their layouts and pared back amenities to make them more recession-friendly, new rental buildings, like 2 Cooper Square and 8 Spruce Street (formerly known as Beekman Tower), are pricier and more luxurious than their predecessors.

"This is an extraordinary moment for the rental market," said MaryAnne Gilmartin, an executive vice president at Forest City Ratner Companies, the developer of the Frank Gehry-designed 8 Spruce Street, which is set to open in 2011. The 867-foot tower will be the city's tallest residential building and have 22,000 square feet of "super-luxury" amenity space, she said.

"The bar is going to be higher once this building opens," Gilmartin said.

According to a quarterly report from Prudential Douglas Elliman, the median rent for a Manhattan apartment in the third quarter of 2010 was $3,000. That was up from $2,950 in the same period last year, but still lower than $3,195 in the third quarter of 2008. In terms of activity, appraisal firm Miller Samuel, which prepares Elliman's reports, tracked 8,593 Manhattan apartment rental transactions in the third quarter, up dramatically from 6,208 in the third quarter of 2008.

Data about the new development rental market -- and the rental market in general -- is sparse, since rental contracts, unlike closed sales, are not publicly recorded. But while many new buildings are still offering incentives such as one or two months' free rent, tenants are currently paying surprisingly high rents at luxurious new buildings, experts say.

Even after rental incentives, "it still works out to a pretty hefty premium for the space, and the [owners are] getting it," said Jeffrey Schleider, a managing director at sales and rental brokerage Miron Properties.

Clifford Finn, managing director of new development marketing at Citi Habitats, said two three-bedroom apartments at Extell's the Ashley at 400 West 63rd Street recently rented for $13,500 per month. At Beatrice, a 301-unit glass rental tower on Sixth Avenue and 29th Street above Kimpton Hotel & Restaurants' new Eventi hotel, two-bedroom apartments have been rented for around $6,500, and studios have gone for $3,400, Finn said.

On average, units at the high end of the new development rental market are now leasing for $75 to $85 per square foot annually, up from the mid-$60s during the worst of the downturn, he said. Because the type of condo-like rental units on the market today were very rare in the past, he said, it's difficult to know what they would have gone for during the boom.

"Three to five years ago, it wasn't typical to have a washer-dryer and nine-foot ceilings in a rental," Finn said.

At 2 Cooper Square in Noho, units are renting at an average of more than $90 per square foot, said Peter Fine, the CEO of Atlantic Development, the project's developer. Several apartments have rented for over $100 per square foot, and one three-bedroom with a library was leased for a whopping $119 per square foot, said Fine. Unlike other new rental buildings, he added, 2 Cooper is not giving incentives to tenants, and even he was somewhat surprised by the building's strong showing.

"It's fair to say we're about 15 to 20 percent above where we thought we would be three years ago," Fine said, theorizing that the building has tapped into a vein of demand for luxury rental housing in the neighborhood. "It's going much better than we thought. We didn't realize how strong the market would be."

Schleider agreed that high prices at 2 Cooper do not seem to be slowing traffic to the building.

This represents an about-face from the last few years, when the outlook for the rental market looked bleak.

When Forest City Ratner's 80 DeKalb in Downtown Brooklyn started leasing in November 2008, "we were all quite concerned about whether we would make our numbers and have the kind of absorption that we projected," said Gilmartin. A year later, the building is 97 percent leased "at pro forma," she noted.

"What that building demonstrated for us was that the rental market is alive and well," Gilmartin added.

Flipping a switch

The current bevy of very high-end rental product on the market is something of an anomaly for New York City.

In the mid-2000s, condos made up the majority of new development in the city, largely because of the high cost of land and construction, and the extraordinary profits promised by condos.

"When the condo market was on fire, no one was building rental product," said Malin. "It didn't make sense for the vast majority of people to build it -- there was just so much more money in the condo world."

"It seemed like a switch was flipped from rental to condo," recalled Jonathan Miller, the president and CEO of Miller Samuel.

But that started to change around 2007. With the onset of the subprime mortgage crisis, lending for new condo projects dried up.

As financing for new condos grew scarce, New York rents were still climbing, which also made new rental buildings more attractive to developers than they'd been in the past. The average rent for a Manhattan one-bedroom apartment in 2002 was $2,047, according to a Citi Habitats semiannual report from that year; by 2008, that figure climbed to $2,608 (though the two reports measure slightly different seasonal periods).

"What you started to see toward the tail end of the condo boom was that the rental market had really grown tremendously in its pricing," Malin said. "Now, the economics that might not have made sense previously to build rentals made sense. [Developers] could provide information to banks that justified what they were doing."

With credit still tight, this trend will likely continue over the next few years, Miller said, adding that the few new development buildings coming online are likely to be rentals rather than condos. "New development is going to shift toward rentals, away from condos," he said.

In the past, rental developers didn't need to do anything special to attract tenants, experts explained, since Manhattan has always had a much lower vacancy rate than other cities.

If developers "built a nice lobby, with pretty forgettable units upstairs, they moved and you kept your costs low and you made money," said Gilmartin, noting that the philosophy of 8 Spruce Street is very different. "I think we were somewhat courageous in that we believed that if we did something really special, the market would reward [us]."

During the boom, Manhattan condo buyers developed a taste for top-notch design and stainless-steel appliances, which may have raised expectations for rentals as well, Finn said.

"People used to just accept that a rental wasn't permanent and it didn't have to be as special as a condo," Finn said. "But Manhattan is a city of renters. What's happened is that people want to live better when they rent."

Be that as it may, developers were still nervous when the first of these high-end rental buildings debuted in the midst of the downturn. The average rent for a one-bedroom apartment in 2009 was $2,406, down 8 percent from the previous year, according to Citi Habitats. Landlords all over the city, meanwhile, had begun paying broker fees and offering several months of free rent.

Then, in May 2009, Larry Silverstein's Silver Towers at 42nd Street and 11th Avenue began leasing, marketed by Citi Habitats. Touting condo-style appliances like Bosch washer/dryers, the building had studios starting at $2,300 per month, one-bedrooms at $3,200 and two-bedrooms at $4,300. When asked by the New York Times how he would lease out the building's 935 market-rate apartments, Silverstein said: "Beats the hell out of me. I've been asking myself that question for weeks."

But the project offered two months' free rent, and the lease-up went faster than expected, said Finn. He said it's approximately 90 percent leased.

J.D. Carlisle Development Corp.'s Beatrice -- where rents initially ranged from $2,700 to more than $20,000 per month -- leased more than 40 percent of its units in only seven weeks after starting rentals this summer, said company president Evan Stein, who added that rents have since been raised slightly. While rents are still lower than the original projections for the project, "it's performing better than we expected" when the leasing office opened, he said.

Staying liquid

While condo developers have had to alter their floor plans and retool their marketing campaigns to emphasize value over luxury, rentals haven't followed suit.

Related, for example, is putting a pet spa -- an amenity often associated with the over-the-top excesses of the boom -- into its new condo-rental hybrid building under construction at 450 West 42nd Street (see "Hybrids, this time with rentals"). The company has a smaller pet spa at another one of its buildings, the Caledonia, but "we wanted to expand upon that," said Daria Salusbury, senior vice president of Related Rentals. "This is much more comprehensive."

Fine said the design of 2 Cooper was actually changed a year and a half ago to make it more luxurious.

"We realized about six months into construction that we didn't design a building with high-end-enough finishes and appliances," he said.

The firm decided to change 2 Cooper's design, amenity package and some of the layouts, adding a pool, rooftop barbecues, and a cinema room for private screenings. The building also has solid oak hardwood floors, stainless steel Liebherr refrigerators, and Bertazzoni gas ranges -- all amenities more typically found in condos.

One reason for the demand for such high-end rentals is, ironically, the continuing credit crunch and shaky economy, experts say.

"It's a function of the mortgage market drying up," said Pamela Samuels, the principal of Trio Partners, a new development venture that is looking to build rental projects as well as condos.

Because it's time-consuming and difficult to get a mortgage, well-off New Yorkers are choosing to rent instead of buy, she said.

Others simply feel more comfortable renting in a still-uncertain climate.

"People are unsure about the economy, and they want to stay liquid," Samuels said, noting that monthly carrying costs on a very high-end rental in Manhattan are still much less than the monthly mortgage on a pricey apartment with similar amenities.

Many of these renters have owned homes in the past, and they don't want to compromise their standard of living. "We may be in a recession, but the types of people that are renting these still have money," Finn said. "They don't want to feel that their lifestyle is less because they chose not to buy."

These factors, combined with a recent uptick in corporate relocations, account for the unusually strong demand for high-end rentals, Finn said.

While the new development rental market is performing better than expected, most projects are nonetheless yielding lower rents than their developers and lenders expected.

"Our ultimate rents were lower than what we had originally pro forma'd back in 2007, but I think that would be the case for any rental project in the city," said Steven Charno, the president of Douglaston Development, which unveiled the new rental building Ohm at 312 11th Avenue in February. Since it opened, the project has offered renters two months of free rent and paid their broker's fees. Whether projects that offered those types of concessions can keep their original renters remains to be seen (see "Fleeing new(ish) buildings").

But luckily, Charno said, the company was conservative in its original projections and was able to save money as construction costs came down.

"It's figuring out ways to be creative and to allow yourself to take a short-term hit on revenue and still have a successful project," he said.

Rental developers are often more conservative than condo builders, since rental projects must have a much lower cost basis in order to pencil out in the first place, said Jon McMillan, director of planning at developer TF Cornerstone.

"Rental developers are kind of a different breed from condo developers," McMillan said. "The condo developers are the ones who are really taking a lot of risk."

At a rental project, by contrast, "if you rent at less than what you wanted for a couple of years, it's too bad, but you can always raise the rent later on," he said. "You can recoup your losses later. You can't do that in a condo -- you have one opportunity to sell and if you sell at a number that's too low, then you've lost, period."



06:57:57 pm Permalink Two Clients: Adriano Hultmann, PDE & Jeffrey Schleider, Miron Properties in New York Magazine   English (US)
Categories: Kreth News, 515 words

Just One More Look

Buyers have taken to calling for a second opinion. And a third, a fourth, a fifth …

By S.Jhoanna Robledo Published Aug 15, 2010

First, the buyer brought her sister to see an uptown apartment, represented by Century 21’s Mary Lou Currier. Then she came back with her decorator, followed by a baby-toting friend, and then an architect. Then there was the meet-and-greet with the super. So far, though, no contract. “I had one person come back three additional times. First he came with his mother, then a girlfriend and co-worker, and then an interior designer and a painter,” recalls Jeffrey Schleider of Miron Properties. “This is all before putting together a number”—and, he adds, an offer never materialized. Condo marketer Adriano Hultmann of Prudential Douglas Elliman has met similarly entouraged buyers. One sixtysomething couple returned to his Queens showings countless times over four months, each time with aunts, cousins, uncles, and their daughter and son-in-law. They finally signed a contract last week.

Start asking brokers about this, and you’ll quickly learn that it’s a colossal irritant—and that lately, it’s happening all the time. “I don’t know whether to smile or to cry, but the trend is definitely there,” says Barak Dunayer of Barak Realty, who attributes the phenomenon to the “level of urgency” in the market—or lack thereof. “Three years ago, people were in such a rush. [Now] buyers think they can bring in their feng shui expert, their mother, their grandmother if she’s around.” Schleider adds that, of late, “what’s unique is the sheer number and the types of people [buyers are] bringing by.” Worried about making a bad investment, they seek reassurance from everyone and—literally—their mother. “After a period of economic downturn, everyone’s buying more cautiously,” explains LoHo Realty’s Jacob Goldman, who says he’s seen a whole lot of feng shui experts dragged along to showings in recent days. “They want to make sure that if they’re going to do it, they’re going to do it right.” They may also be seeking reasons to be dissuaded. One shopper, a bank auditor, passed on a sunny co-op priced below market because it wasn’t auspiciously laid out. But he also admits, “In the back of my mind, I was looking for reasons it might not be a good idea.” His father’s comments provided just enough justification to say no.

Are brokers, desperate to figure out whether their potential customers are serious, reduced to looking for tells, like poker players? Hultmann says he’s encouraged when they start measuring rooms for furniture, and Dunayer says when buyers hire a real-estate lawyer, that’s a good sign. But Goldman, who’s waiting on a client with an accepted offer who has returned three times, testing every electrical outlet and requesting changes in the contract, says that “sadly, the only tell is that they actually sign the contracts. Even making an offer and saying they will take the place means nothing.” He’s still showing that apartment.

06:54:21 pm Permalink Bid on the City,, Manhattan Bargain Hunters Can Save A Ton   English (US)
Categories: Kreth News, 315 words

Manhattan Bargain Hunters Can Save a Ton on UES Apartments Though Online Auction

By Gabriela Resto-Montero

DNAinfo Reporter/Producer

UPPER EAST SIDE — Bargain hunters looking to buy a home in one of Manhattan's most exclusive districts can save hundreds of thousands of dollars through an online auction where bidding starts at $1.

Two studio apartments on the Upper East Side are being auctioned off Sept. 21 by online realtor Bid on the City. For the price of a lottery ticket, potential bidders can get in on the action with a chance to hit a housing savings jackpot.

"The bidding auction is a way to get maximum interest in the property," said Albert Feinstein, 35, a founder of the website.

Previous winning bids for Upper East Side apartments have come in well under the listed price, said Kelly Kreth, a spokeswoman for the company.

In one instance, an East 74th Street apartment listed for $595,000 received a winning bid of $375,000, Kreth said.

Prospective buyers can go online to check out the properties, none of which are under foreclosure, or stop by open houses before registering for the auction.

Once the bidding starts, sellers receive a winning offer within 10 minutes, Feinstein said.

"It's useful that way," he said of the streamlined buying process.

The two apartments up for grabs on the Upper East Side reflect what Feinstein said are the best selling items in the neighborhood — tiny apartments for young professionals.

The properties include a 400-square foot studio at 1420 York Ave., at East 76th Street, listed for $445,000, and a slightly bigger 500-square foot studio at 505 East 82nd St. listed for $295,000.

If the winning bid falls below the reserve sale price of the apartment, owners can decide to negotiate, Feinstein said.

So far, about 50 percent of the homeowners who put their properties up for auction have successfully sold them, he said.

Read more:



10:41:26 am Permalink Miron Properties on WPIX TV   English (US)
Categories: Kreth News, 17 words Permalink
10:32:59 am Permalink Miron Properties in The Real Deal: Welcoming Back Graduates   English (US)
Categories: Kreth News, 903 words

Welcoming back grads -- at least some
Post-college renters are back in the city, but activity not as strong as some expected
June 02, 2010 07:00AM

By Candace Taylor

In New York, springtime usually means a flood of fresh-faced college graduates ready to start their first job and live together in their first rental apartment.

Last year, much to the dismay of many brokers, that flood was more like a trickle, thanks to the recession. Now, with the economy improving, agents and landlords are expecting the much-hyped return of renters to the market.

"In 2009, there was an eerie lack of the annual stream of recent grads moving to the city for their first job," said Jeff Schleider, founder of Manhattan-based brokerage Miron Properties. "It's reassuring to see that these grads are back."

Buoyed by good news about the real estate market and the economy, landlords and agents gleefully primed themselves for the return of these newly minted renters. Over the last several months, as The Real Deal has reported, many landlords raised their rents and scaled back concessions, such as a month's free rent. For example, Glenwood -- one of the city's major landlords -- spread the word that beginning June 1, it would no longer offer a month of free rent at any of its buildings. (The company will continue to pay brokers' fees, for the time being at least.)

Jared Wiener, the director of sales and leasing at Platinum Properties, estimated that rents are around 5 percent higher than last year at this time. "This season, the landlords are coming out with guns blazing," he said.

But they may be getting ahead of themselves. Some rental agents reported last month that despite the buzz, activity has actually been slower than expected so far this season.

"Rental transactions have been steady since April," said Takeshi "Takk" Yamaguchi, an agent at DJK Residential. "That being said, it's nowhere near as hectic as I thought it would be."

While "landlords are taking away incentives in certain neighborhoods and buildings," he said, "they should not get too carried away in areas like the Upper East Side and Midtown."

Wiener agreed. "May is slower than anticipated, which is surprising," he said. "Clearly the job market is not helping."

That, or renters are reluctant to sign on the dotted line because they're displeased with the deals they're finding. "It's tough when their friends were able to get a similar apartment six months ago for a lower price and a free month's rent," Miron's Schleider said.

Buyers are having a similar experience. Expecting to find a slow market where they'll have their pick of deeply discounted apartments, they're surprised to find intense competition instead.

"Buyers can't believe that there are multiple offers and bidding wars happening so regularly, until they experience it firsthand," said Ari LeFauve, a vice president and associate broker at the Real Estate Group New York.

The competition is being fueled by a continued shortage of well-priced inventory, brokers said, as well as a large number of bargain-hunting buyers all reentering the market at the same time.

"Buyers are coming out of the woodwork," said Ali Jafri, an agent at Prudential Douglas Elliman. "There is a release of pent-up demand."

As a result, "everyone is going after the same listings," said Rob Jackson, a salesperson at the Corcoran Group.

The competition also intensified this spring thanks to the end of the federal homebuyer tax credit program on April 30, and those buyers are now racing to make sure their deals close before the deadline of June 30.

"The government stimulus tax break definitely gave even more urgency for buyers," said Fumiyo Hayashi, a vice president at Barak Realty. "What's difficult right now is the pressure of making sure that things are moving so that the buyers can close by the end of June to capture the tax break."

In general, buyers who don't make offers quickly enough are finding that, often to their great displeasure, they are getting outbid on the properties they want -- sometimes multiple times.

Others can't find homes at all, which can be frustrating.

"In the large-apartment segment, meaning eight to 12 rooms, there is simply no inventory," said Deborah Komarow, an agent at Warburg Realty Partnership, noting that few of these large homes have come on the market recently because sellers want to avoid discounting them. "Now that the market has stabilized, the large-apartment buyer has come back into the market, and there is nothing to show them."

Some buyers simply aren't able to accept that the crisis may be over, said Judi Desiderio, the CEO of Hamptons-based Town & Country Real Estate.

"You have the half-empty/half-full mentalities," she said. "Some are playing it like Chicken Little, 'The sky is falling,' and expect a double-dip recession with housing taking another tumble. Others -- and this is the majority -- believe we have bottomed out and are ready to buy."

One lingering concern for many is the economic turmoil in Europe.

"The Euro zone crisis may still yet spill over into the global markets, which in turn will hit New York real estate values, and this is of serious concern," said Schleider.

Still, conditions are markedly improved for brokers.

As John Reinhardt, president and CEO of Fillmore Real Estate, said, "It's great to be busy again."

"If we're taking vacations, we're not staying away too long," he said. "This is the right environment for a salesperson."