Paying $40,000 a Month in Brooklyn, and Other Sky-High Rents
Brooklyn has put another sky-high rental in its books, with the leasing, starting in July, of 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 a stretch when it hit the market in late May, considering the previous tenant was paying $17,500.
But to her great surprise, an Upper East Side family, competing with another well-heeled bidder, made the offer within two days of the penthouse being listed. And without ever stepping foot inside. “They rented while they were on vacation,” said Ms. D’Alessio, who is also Nest Seekers’ director of new development.
So what will they be getting for the next year? Nearly 3,000 square feet of interior space, with four bedrooms and three and a half bathrooms, plus a rooftop terrace with some pretty impressive panoramic views of the Manhattan skyline and beyond.
In June 2021, a four-story townhouse at 149 Clinton Street, also in Brooklyn Heights, rented for $30,000.
Across New York City, landlords and brokers — especially those at the high end — have been testing the upper limits as rental rates steadily rise amid a sharp drop-off in inventory. Since the start of 2021, there have been at least three rental listings at the $100,000 mark in Manhattan, versus one in 2019, and seven during that 18-month period at $25,000 or more in Brooklyn, compared with none three years ago, according to Jonathan J. Miller., a Manhattan-based appraiser. (He’s not sure, though, how many of these apartments were rented out at those prices)
Citywide, the median rent reached $4,000 in May, according to the latest market report prepared by Mr. Miller for Douglas Elliman, which is likely a record, or at least the priciest ever reported by the brokerage firm. The median in Manhattan reached almost $5,000, and Brooklyn, $3,250.
Market watchers have been amazed by the quick turnaround since the start of the pandemic.
“I’ve never seen a market do the boomerang that it has done over the past 15, 16, 17 months,” said Daniel Levy, the president of CityRealty, which tracks sales and rentals, mainly in Manhattan and Brooklyn. “You couldn’t give away the apartment before, and there were incentives to rent. Now for virtually every apartment, there’s a line out the door to get in.”
At Manhattan’s soaring luxury towers, there are a limited number of apartments available for rent right now, each with equally soaring prices. The city’s most expensive residential building, 220 Central Park South, has just one rental, a five-bedroom unit on half the 37th floor, listed for $75,000 a month, according to StreetEasy; another rental for $85,000 was snapped up a few months ago.
At 50 United Nations Plaza, there are six apartments for rent. This includes the penthouse, listed for $75,000 a month, and currently in the process of being leased to a foreign tenant, said Joshua Young, the managing director for sales and leasing at Brown Harris Stevens.
Downtown, the Jenga-like building at 56 Leonard now has one rental apartment available, a three-bedroom for $28,500 a month, according to StreetEasy. Ten other units, with rents ranging from nearly $9,000 to $35,000, were rented out earlier this year, according to the site.
“There’s not a lot of new product coming on the market,” Mr. Levy said, noting that the construction pipeline for residential buildings had tapered. “There are new projects in the process of being built now, but won’t’ be delivered for another year or two or three.”
Wealthy foreigners have been especially interested in renting in New York, brokers say. Mr. Young, for one, said he has noticed an increase in online traffic from Europe — Italy and France, in particular — on his company’s social media and website. “Six percent of our web traffic is international,” he said.
“Once Covid restrictions loosened, we saw a big push of international renters looking to get into the city,” he added. “They first may want to experience the city, and while they were here look for something to buy.”
At the high end — where monthly rents start at around $10,000, Mr. Young said — many “are looking at luxury condos, townhouses and Park Avenue co-ops, mostly as 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 set to begin in July.
“That same apartment rented last year for $12,500 a month,” she said, adding, “I had an application within 24 hours of it being on the market.”
While today’s high-end renters almost certainly have the means to buy, some may be waiting for the newer projects to come online. Others want to explore different neighborhoods first, as well as the city itself, before making a commitment.
The Upper East Side family that will be renting the Brooklyn Heights penthouse had decided to relocate to Brooklyn mainly for the schools, Ms. D’Alessio said. Also, “I think they wanted to test out” the neighborhood, she added. She would not identify the renters.
And with many businesses now allowing their employees the flexibility of working remotely, at least for part of the time, neighborhood options have greatly expanded. “People are now looking to have the lifestyle they want,” Ms. D’Alessio said. “They don’t care about the commute.”
Mr. Miller concurred, “All of a sudden the subway trip is not the deciding factor.”
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