The Real Deal New York

Manhattan apartment landlords increasingly gut renovate buildings in pursuit of higher rents

May 09, 2012 09:30AM

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Citi Habitats' Clifford Finn and 247 East 28th Street

The white-hot rental market and the shifting demographic of renters has compelled more New York City landlords to invest in extensive renovations of their rental properties, according to the Wall Street Journal. Landlords of apartment buildings that are 10 to 30 years old are spending millions to gut renovate well-located buildings and raise rents 10 to 40 percent.

For example, as The Real Deal previously reported, Silverstone Property Group is completely renovating the 128-unit rental building it bought earlier this year at Second Avenue and East 28th Street. It is gutting units, adding a courtyard with Wi-Fi, a sun deck and an amenity room. Once completed Silverstone plans to charge $4,000 per month for a one-bedroom apartment, which is in line with new developments in the area, according to Citi Habitats’ Clifford Finn, who was tapped to market the units.

The Journal lists at least five more similar properties undergoing major upgrades.

Renters sometimes prefer renovated older buildings to their newer counterparts because they feel the construction was more sturdy in decades past.

In today’s rental market from Citi Habitats, which The Real Deal reported set another new price record in April and features older tenants waiting until their middle ages to settle down, those renovations can have an immediate impact. A $5 million to $10 million investment can yield an immediate 10 percent to 12 percent jump in rents, according to Rose Associates. [WSJ]

  • Harlemite

    It’s happening all over – with increased prices comes better service.

    One of the reasons prices are going up is that apartments are in better condition. It just pays to renovate and re-rent at higher rates.

    Personally, I think it’s great – I love to see the old buildings in Harlem get nice renovations. Now that prices are heading higher we’ll see more renovations in my neighborhood. I love it.

    NYC’s housing stock has never been in better condition and I look forward to it becoming even better.

  • http://www.RDNY.com Lorenzo

    Another, more subtle reason for the better condition of apartments and better amenities offered in apartment buildings these days is that renters, for the first time, can truly “shop” for apartments.

    No longer are renters limited to visiting between 5 and 10 apartments before making a decision about which apartment. Now, with the internet, renters shop through hundreds of listings and can compare features, amenities and sift through hundreds of photos of the buildings and interiors.

    My company, RDNY.com, which specializes in no fee apartment rentals throughout NYC, has over 63,000 images of buildings, interiors, and floorplans. And our renters are insatiable! They want more and more pictures before they go to look at apartments.

    Landlords, if you are smart, you’ll have professional photos taken of your buildings and your apartment interiors, and you’ll make all of those images easily accessible to people like us, RDNY.com, who help market your apartments.

    Good interior photos bring top rental prices.

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