Revising the Rental
The New York Times highlights City Tower as one of Downtown Brooklyn’s top upcoming rental properties offering a range of top-tier indoor and outdoor amenities.
Developers of large rental buildings have stuck to a formula over the past several years: Keep apartments small; go big on amenities. Now, with a surge of rentals coming to market, some developers are pushing this formula to the max, tweaking apartment sizes and piling on the perks.
More than 13,000 new rental apartments are expected to open their doors in Manhattan, Brooklyn and Queens this year, according to Citi Habitats, one of the city’s largest rental brokerage firms. In Manhattan, the anticipated 4,900 apartments in 34 new rental developments represent a 25 percent increase from the 2009 peak, when 3,918 rental units opened for leasing.
Brooklyn will receive even more — about 6,500 new rental units across 134 buildings in 2015, more than double last year’s 2,981 units in 36 buildings. And don’t forget Queens, where at least 1,800 new apartments in 18 buildings are anticipated in Long Island City this year.
Many of the major new developments will have sprawling floors of amenity space, including bowling alleys, basketball courts and in-house dog runs. Some developers hope that the attention lavished on shared space will help offset another trend sweeping the rental industry, shrinking apartments.
Among the most ambitious rental buildings to debut in Manhattan in 2015 is 70 Pine, a conversion in the financial district.
Creating studios with even 50 fewer square feet than the average in a neighborhood, say, to 450 square feet from 500 square feet, allows developers to keep rents competitive as they try to turn a profit amid rising land prices.
The influx of apartments comes at a time when rents have been pushed to new limits. The average monthly rent in Manhattan reached a record $3,438 in 2014, according to Citi Habitats. Rents in fashionable Brooklyn are catching up fast, sometimes surpassing Manhattan. In December, the average monthly rent was $3,088 in Boerum Hill, $3,205 in Williamsburg and $4,237 in Dumbo, according to MNS, a brokerage firm.
Despite these highs, rents overall are expected to stay relatively stable this year.
“I call it the high plateau,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel.
The market for high-end rentals will persist, he added, because while hefty rents are often an incentive to buy, the leap to homeownership right now is complicated by tough lending standards, hefty down payments and a general lack of apartments for sale at the lower end of the market.
Facing such high rents, New Yorkers expect to be impressed. “You can’t just build a vanilla building,” said Gary L. Malin, the president of Citi Habitats. “Renters want to walk in and see the latest, greatest and best.”
Condo-like finishes, high-end appliances, personalized services and amenities galore have become standard in large luxury rental buildings, he said. “You can’t get the pricing you want to get unless you’re building that.”
To one-up the competition — and justify top rents — landlords and developers are becoming creative.
Among the most ambitious rental buildings to debut in Manhattan in 2015 is 70 Pine, a conversion of the former headquarters of the American International Group in the financial district.
Developed by Rose Associates, a major city landlord, and DTH Capital, the landmark Art Deco tower will have 612 rentals above a new extended-stay hotel called Q&A, with leasing to begin in the spring.
In addition to a long list of amenities including a screening room in a former bank vault and a two-story La Palestra gym with a two-lane bowling alley, there will be a restaurant and lounge on the top three floors of the 66-story tower. Several outdoor terraces will offer dining with “outrageous unimpeded views,” said Adam R. Rose, a co-president of Rose Associates, who promised the chef would be among the city’s top talents. While the space will be open to the public, only residents will be guaranteed a table. Everyone else will be seated on a first-come, first-served basis.
Downstairs, the Art Deco lobby is being restored with an eye to residents and visitors alike, including a coffeehouse and a barbershop. Apartment prices haven’t been released, but are expected to be similar to those at the nearby New York by Gehry building at 8 Spruce Street, where the cheapest available studio the other day on the building’s website was $2,760 a month.
The biggest rental building opening in Manhattan this year will also be piling on the perks. Developed by the Moinian Group, 605 West 42nd Street will add 1,174 units to the market this spring, including 235 that are designated as affordable.
To lure tenants to its Far West Side location in the Hudson Yards area, it will offer a grand lobby, lounges, a restaurant with outdoor dining, a 70,000-square-foot fitness center with indoor and outdoor pools, and a 70-foot reflecting pool, among other features. Rents will be priced at “premium levels for the neighborhood,” according to the developer.
Brooklyn and Queens are also experiencing amenity creep, as tall towers continue to propagate inland and along the waterfronts. “We are encouraging our clients to really put out top-of-the-line product and practical amenities packages, at times geared to get people’s attention,” said David J. Maundrell III, the founder of aptsandlofts.com.
That was the idea behind the outdoor pool at QLIC, a 421-unit rental in Long Island City developed by World Wide Group and its partners, Rabina Properties and Cammeby’s International Group. The 10th-floor pool will offer stunning Manhattan skyline views, said Mr. Maundrell, who is handling leasing for the building, to begin in March.
According to the building’s website, the pool at QLIC is just a part of the " ‘fun factor’ built into its DNA.” Among the more than 28,000 square feet of amenities are a landscaped roof deck with an outdoor theater, barbecue and dining areas, and a double-height media lounge with stadium seating and Manhattan views.
In Downtown Brooklyn, AvalonBay Communities is developing an 826-unit rental complex at 100 Willoughby Street, with a dog run with separate places for small and large dogs to play and a heated pergola for owners. Nearby, the Brodsky Organization recently topped out City Tower, a 440-unit rental at 336 Flatbush Avenue Extension above the City Point retail complex. The developer expects the downstairs subway, movie theater and restaurants to be a draw for tenants.
"Think of [the City Tower retail space] as a great food court downstairs with lots of Brooklyn eateries."
“Think of it as a great food court downstairs with lots of Brooklyn eateries,” said Dean Amro, a principal of the Brodsky Organization. “We think those things will be great conveniences for our residents.”
The building will also have half-court basketball, a residents’ lounge, a fitness center, a rooftop terrace. There will also be a quarter-acre terrace on the 19th floor with a lawn. Leasing is expected to begin in the fall.
Some developers hope that the space devoted to shared amenities will make it easier for renters to live in smaller apartments. Smaller spaces also allow developers to shrink rents accordingly. At QLIC, studios measure between 420 and 470 square feet and are expected to begin at $1,995 a month. The average rent for a studio in Long Island City in December was $2,338 a month, according to MNS.
In Williamsburg, Brooklyn, 247 North 7th, a 169-unit rental developed by Adam America, will offer large alcove studios designed to “feel like a one-bedroom,” but renting for slightly less than a true one-bedroom, said Mr. Maundrell of aptsandlofts.com, which is handling leasing. At the same time, such “tween studios” or “junior ones,” as he calls them, allow developers to charge more than they would for a more compact studio.
“There is very little fat, so to speak,” he said, estimating such units could go for $2,800 a month in a market where monthly rents for a typical one-bedroom start at $3,000 and a studio begins at $2,600. “Right now, even a $50 to $100 difference in rent per month moves the needle,” said Mr. Maundrell, who is working on a similar apartment concept at 490 Myrtle Avenue in Clinton Hill, a 93-unit rental developed by Madison Realty Capital. “People make decisions based upon that.”
The market for tiny apartments will be tested when My Micro NY debuts at 335 East 27th Street later this year with 55 prefabricated apartments of between 260 and 360 square feet, smaller than what zoning laws ordinarily allow. The 10-story building, a collaboration by Monadnock Development, Actors Fund Housing Development Corporation and nArchitects, is the fruition of a competition to design and build an apartment tower full of micro-units on city-owned land sponsored by the New York City Department of Housing Preservation and Development and endorsed by former Mayor Michael R. Bloomberg.
But not all rentals are getting smaller. Taking a cue from the condo market, some Manhattan rental buildings are going in the opposite direction. At 393 West End Avenue on the Upper West Side, Simon Baron Development is overhauling a prewar rental with 113 apartments, combining vacant units to create 47 large apartments with families in mind. The apartments, mostly two-, three- and four-bedrooms, will range from 893 to 2,274 square feet. Developers have been successful with family-size residences, said Jacqueline Urgo, the president of the Marketing Directors, a New York development advisory, leasing and marketing company, which is handling the project. “We think there’s a real niche to be filled in similar luxury rentals.”
Designed by Vicente Wolf, the West End Avenue apartments are expected to rent from $5,250 a month for a one-bedroom to $23,000 a month for a four-bedroom. The building, which plans to begin leasing in May, will include a courtyard, a children’s playroom and a gym.
If none of these new rentals pique your interest, there’s always next year. Among the large and eye-catching buildings expected to open are a 709-unit rental resembling a pyramid at 625 West 57th Street, designed by the BIG-Bjarke Ingels Group and developed by the Durst Organization; and 626 First Avenue, two copper towers cinched together by a sky bridge that will house 800 rentals, designed by SHoP Architects and developed by JDS Construction Group.
“These are the ones to watch as they come to market in 2016,” said Jodi Stasse, the managing director for new developments at Citi Habitats. “They are interesting because of their sheer size and great diversity in the project design.”
Correction: February 1, 2015
A cover article last Sunday about the rental market in New York City misstated the floor on which a quarter-acre terrace is being built in the City Tower building in Downtown Brooklyn. It will be on the 19th floor, not on the 30th.