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The $35,000-a-Month Rental

At this stratospheric price point, who would rather rent than buy? Apparently, lots of people.

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Photo Credit: Donald Bowers for New York Magazine

It seemed a simple enough mission: A downtown couple working with Leonard Steinberg, senior vice-president at Douglas Elliman, wanted to rent an apartment in the Village. Since they were willing to spend $20,000 a month, they hadn’t anticipated running into the same lack-of-inventory problem every New York house-hunter does. But after playing second fiddle to the sales market for years, those high-end rentals are in demand again, and the couple struck out. “I have another gentleman from Europe and can spend up to $10,000, and I can’t find anything,” Steinberg adds.

Who rents at this level? Some lease-signers are planning on limited stays: diplomats, actors, elite consultants, people who are camped out during renovations. But others have their own reasons. John Kelly, a Citigroup futures broker who netted $250,000 from the sale of his Upper West Side co-op, decided to rent an apartment at the newly opened Grand Tier across from Lincoln Center, predicting that the market has peaked. “People have this perception that prices can only go higher,” says Kelly. “But bull markets don’t last forever.” Pure cash-flow issues are sometimes part of the equation, too. At the Grand Tier, the monthly rent for a four-bedroom duplex is $35,000. Buying a comparable place could cost up to $12 million, and—with a smallish down payment—a mortgage in that range can approach $70,000 a month. Crazy as it sounds, it’s cheaper to rent, at least for a while.

Whatever the reason, high-end lessors are delighted with a market that Douglas Wagner, president of Benjamin James Real Estate, describes as having “a 1 percent vacancy.” At the Grand Tier, the office closed for two months “because our move-in calendar was totally full,” says Gary Jacob, executive vice-president of Glenwood Management. Fifth Avenue’s Sherry-Netherland has received calls about long-term stays “far more than in the past,” says chief operating officer Michael Littler. As for prewars like the Apthorp (where 60 Minutes’ Steve Kroft lives, and Al Pacino and Nora Ephron did until recently) or 135 Central Park West, “they have exquisite apartments, but try to find one,” says Steinberg. Same story downtown.

That’s certainly a turnaround from last year, when buildings were happy to cut deals—one or two months free or no broker’s fees—to entice tenants. Now, says David Wine of the Related Companies, which owns fifteen luxury-rental buildings in Manhattan and is set to open another one in Tribeca this spring, those who hold out will find themselves “laughed out of the building.”


Movers
This Is NBC’s Ron Allen, on the Upper West Side
NBC News reporter Ron Allen and his wife, CNN’s Adaora Udoji, have chased down major stories as foreign correspondents, but few assignments have proved as elusive as the search for the perfect New York apartment. After spending months searching, and trudging through nearly 100 showings, they’ve finally bought a 2,200-square-foot three-bedroom in a brand-new high-rise on the Upper West Side for a bit under $2 million. The catch? When they signed on, it hadn’t been built yet. But construction is finished, and the space is now ready for the tchotchkes and furniture they’ve collected from their various overseas assignments. (Both Allen and Udoji have done stints in the Middle East, covering the Iraq and Afghanistan wars.) “They’re thrilled,” says their agent, Rosemarie Bernard of Coldwell Banker Hunt Kennedy, who’s no doubt happy to be done with all those showings herself.

Same Space, Different Place
The Renovation Bounce
Not only are these Soho apartments in the same building; they also have the same square footage and similar layouts. Yet one’s listed at $124,000 more than the other, a 17 percent premium. “If you saw them, you’d understand,” says Corcoran’s Barry Rudnick, who’s repping the pricier space. “My sellers put in cherrywood cabinets, stainless-steel appliances, and slate countertops and floors in the kitchen. And in the bathrooms, it’s all marble and new fixtures”—about $75,000 worth of work. Rudnick says he has two offers; maybe the losers can grab the other place, and do a super-duper renovation of their own.

2 Charlton Street
The Facts: 2-bedroom, 1-bath, 925-square-foot co-op.
Asking Price: $849,000.
Common Charges: $917.
Broker:: Barry Rudnick, the Corcoran Group.

2 Charlton Street
The Facts: 2-bedroom, 1-bath, 925-square-foot co-op.
Asking Price: $725,000.
Common Charges: $926.
Broker:: Charles Zivancev and Patricia Galante, the Corcoran Group.


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