Home Finance Pay $40,000 a month in Brooklyn and other sky-high rents

Pay $40,000 a month in Brooklyn and other sky-high rents

by YAR

Brooklyn has put another sky-high rent on its books, leasing, starting in July, a sprawling duplex for $40,000 a month.

The apartment sits atop 67 Livingston Street in Brooklyn Heights, a boutique rental building that was initially planned as a condominium. It had actually been listed for $30,000, which the broker, Bianca D’Alessio of Nest Seekers International, thought was an exaggeration when it went on the market in late May, considering the previous tenant was paying $17,500.

But to his great surprise, an Upper East Side family, competing with another wealthy bidder, made the offer within two days of the penthouse’s listing. And without setting foot inside. “They rented while on vacation,” said Ms. D’Alessio, who is also director of new developments for Nest Seekers.

So what will they get for next year? Nearly 3,000 square feet of interior space, with four bedrooms and three and a half baths, plus a rooftop terrace with some pretty impressive panoramic views of the Manhattan skyline and beyond.

In June 2021, a four-story row house at 149 Clinton Street, also in Brooklyn Heights, was rented for $30,000.

Across New York City, landlords and brokers, especially high-end ones, have been testing the upper limits as rental rates rise steadily amid a sharp drop in inventory. Since the beginning of 2021, there have been at least three rental listings at the $100,000 mark in Manhattan, up from one in 2019, and seven during that 18-month period at $25,000 or more in Brooklyn, up from none three years ago. years, according to Jonathan J. Miller, a Manhattan-based appraiser. (However, he is not sure how many of these apartments were rented at those prices.)

Citywide, median rent hit $4,000 in May, according to the latest market report prepared by Miller for Douglas Elliman, which is likely to be a record, or at least the most expensive ever reported by the brokerage firm. The median in Manhattan was nearly $5,000 and in Brooklyn, $3,250.

Market watchers have been surprised by the rapid turnaround since the start of the pandemic.

“I’ve never seen a market boomerang like it has in the last 15, 16, 17 months,” said Daniel Levy, president of CityRealty, which tracks sales and rentals primarily in Manhattan and Brooklyn. “Before you couldn’t give the apartment away and there were incentives to rent. Now, for practically every apartment, there is a line out the door to get in.”

In Manhattan’s soaring luxury towers, there are a limited number of apartments available for rent right now, each priced equally high. The city’s most expensive residential building, 220 Central Park South, has only one rental, a five-bedroom unit in the middle of the 37th floor, listed at $75,000 a month, according to StreetEasy; another rental for $85,000 was purchased a few months ago.

At 50 United Nations Plaza, there are six apartments for rent. That includes the penthouse, listed at $75,000 a month, and currently in the process of being leased to a foreign tenant, said Joshua Young, managing director of sales and leasing for Brown Harris Stevens.

Downtown, the Jenga-like building at 56 Leonard now has a rental apartment available, a three-bedroom apartment for $28,500 a month, according to StreetEasy. Ten other units, with rents ranging from $9,000 to $35,000, were leased earlier this year, according to the site.

“There aren’t a lot of new products on the market,” Mr. Levy said, noting that the construction pipeline for residential buildings had shrunk. “There are new projects under construction now, but they won’t be delivered for another one or two or three years.”

Wealthy foreigners have taken a particular interest in renting in New York, brokers say. Mr. Young, for his part, said that he has noticed an increase in online traffic from Europe, Italy and France, in particular, on social media and his company’s website. “Six percent of our web traffic is international,” he said.

“Once the Covid restrictions were relaxed, we saw a big push from international tenants looking to get into the city,” he added. “They may first want to experience the city and, while they were here, find something to buy.”

At the high end, where monthly rents start at around $10,000, Young said, many “are looking for Park Avenue luxury condos, townhomes and co-ops, mostly like pieds-à-terre.”

Ms. D’Alessio says a student from South America just rented a three-bedroom duplex for $20,000, also with a rooftop terrace, at 554 82nd Street on the Upper East Side. The one year lease is scheduled to start in July.

“That same apartment was rented last year for $12,500 a month,” he said, adding, “I had an application within 24 hours of going on the market.”

While today’s high-end tenants almost certainly have the means to buy, some may be waiting for newer projects to come online. Others want to explore different neighborhoods first, as well as the city itself, before committing.

The Upper East Side Family who will rent the Brooklyn Heights penthouse had decided to move to Brooklyn primarily for the schools, Ms. D’Alessio said. Also, “I think they wanted to try out” the neighborhood, she added. She did not identify the tenants.

And with many companies now allowing their employees the flexibility to work remotely, at least part of the time, the neighborhood options have been greatly expanded. “People are now looking to have the lifestyle they want,” said Ms. D’Alessio. “They don’t mind the journey.”

Mr. Miller agreed: “Suddenly the subway ride is not the deciding factor.”

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