NYC's wealthy, leery of buying, embrace super-pricey rentals
Composer Claire van Kampen and her husband, actor Mark Rylance, aren’t typical Manhattan renters paying $2,500 a month for a shoebox apartment.
Instead, they come home to a boho chic penthouse with three baths, Baccarat chandeliers, two terraces and a pair of working fireplaces in the historic Chelsea Mansion on West 20th Street — an apartment that in the past has been listed for $20,000 a month. Van Kampen said she had no idea how much the apartment is going for, since her husband’s employer is paying for it.
Such lofty rent tabs are more common in Manhattan than ever. As the fumbling housing market has pushed the rest of the country to renting, the city’s venerable luxury market has followed suit. Now, penthouses and townhouses that might have sold for millions rent for up to $50,000 a month.
What’s more, uncertainty about the sales market’s future erects a psychological barrier, even among people who can well afford to buy.
“It wouldn’t make sense for us to buy here,” said van Kampen, who has been living in the French- and Buddhist-influenced flat with a “mezzanine floor” for a bedroom since Sept. 18, when Rylance came here to star in “Jerusalem,” for which he’s just been nominated for a Tony.
The couple has a home in London and never knows where their theater work will take them or for how long. Plus, van Kampen said, Manhattan “is a renter’s market.”
“You can only get properties like this if you rent in the short term, because they’re so unusual,” she said. She and Rylance work long, demanding hours and haven’t the time to negotiate the headaches involved with the purchase of a home.
Michael Bolla, managing director at Prudential Douglas Elliman, who is the broker/developer for the 11,000-square-foot Chelsea Mansion, turned the sprawling property into a complex of five rental units because “our clients are always looking for short-term rentals.”
Though Bolla has seen demand for luxury rentals for many years, he said brokers have had to adapt to a spike in that demand since the economic collapse made the cost of home ownership soar and depleted high-end inventory.
HotPads.com, a New York listings website, conducted a study last year noting that demand drove median rental prices up 9 percent last year, while sale prices dropped 6.8 percent.
“That shift is much higher than we’ve seen in the past,” said Paul Gleger of HotPads. “We saw the opposite taking place during the housing peak of 2006.”
Robert Eisenstein of HomeRun Homes, an online rent-to-own service that homeowners use to list their properties for rent when they can’t sell, said interest in the site “has spiked as people realize they need to rent to own or face the alternative of sitting and waiting it out while still making payments.” Many tenants sign 12- to 36-month leases before buying the property, he said.
“This sector of the market has been filing up fast,” Eisenstein said.
When people with money to spend aren’t buying, it could mean that today’s rental trend will persist.
“Until world unrest stabilizes and economic markets equalize, rentals are here to stay,” said Richard Steinberg, a broker featured on HGTV’s “Selling New York.”
Well, it doesn’t seem like that’s going to happen anytime soon.
For the foreseeable future, “we predict renting will probably be a better option, especially in NYC,” Gleger said.
Who's renting $50,000 pads?
* Mark Menendez, director of rentals at Prudential Douglas Elliman, said a lot of celebrities sign short-term leases at some of the priciest properties in the city while they’re in town for filming or Broadway gigs.
* High-power firms are snatching up short-term luxury rentals for executives to attract new talent, said Douglas Wagner, co-chair of the Residential Rental Committee of the Real Estate Board of New York.
* People who want a taste of the shi shi lifestyle before they decide to make a more permanent investment will rent luxury properties for a period of time before buying, Eisenstein said.