From the January issue: They’re giving it away. Hundreds of buildings these days tout one, two
and sometimes three months of free rent on new leases. But most of the
time, the “base rent” stays the same, even as rental agents talk about
“net effective” rents — the apartment’s cost once the free rent is
amortized over the life of the lease. It’s sort of like a no-money-down
offer. Brokers say that despite their popularity, net effective rents are
something of a gamble for landlords: Lower the initial sticker prices,
fill apartments and pray that the market rebounds and tenants stay
after their lease expires.
But there are signs that lenders may be allowing landlords to lower
the base rent instead of relying on concessions, thus recognizing that
market-rate rent levels have lowered.

Despite the recession, the practice of including major sculptures and
artwork to high-end New York City real estate projects has prevailed.
The Rockefellers started the trend of using pricey sculptures and
artwork to adorn prominent properties during the 20th century and the
practice has continued despite economic gloom. For example, in October,
Cohen Brothers Realty installed a $3,300 dollar, 5,000-pound sculpture
on the ceiling in the atrium of 805 Third Avenue. Silverstein
Properties included a Tom Otterness-designed playground sculpture in a
new park near to two of its apartment developments on West 42nd Street
which was priced in the seven-figure range. “Sculpture can also add a
human element. Often in New York, buildings are overscale; sculpture
can bring the scale down,” said Joel Straus, a corporate art consultant
in Chicago. [NYT]
[more]

Nancy Packes, president of her own new development marketing firm, at 316 11th Avenue, where she is the leasing consultant. The building is slated to begin renting units this winter.

From the December issue:
Once the province of a few niche players, the new development rental
sector is becoming a hotly contested battleground as brokerages look to
replace once-lucrative condo deals.
In the booming economy of the mid-2000s, many new development
marketing firms focused most of their attention on sales, while a few
firms had the rental field to themselves. But now, as marketers migrate over from the stagnant condo market,
newly built rentals are emerging as an increasingly important source of
revenue. And the sector is only expected to grow more competitive in
2010. “During the condo boom, they only focused on condos — that’s where
the money was,” Citi Habitats President Gary Malin said of new
development marketing firms. “Their condo stuff has slowed down, so
they’re trying to get in [to the rental market]. They’re looking to
find other revenue streams,” he added. While the pipeline of condos coming to market is slowing, brokers anticipate a healthy number of new rental buildings in 2010, largely because they have proved easier for developers to finance in the current climate. Some 2,935 rental units have come online in Manhattan so far this year, compared to 1,482 in 2008, according to a market report by Nancy Packes, the president of Brown Harris Stevens Project Marketing and founder of her own new development marketing firm, Nancy Packes, Inc., which does both new development sales and rentals.  More

[more]

From the December issue: Rental projects were long considered bulletproof, a safe backup for
more profitable and risky condos. But with the precipitous drop in New
York City rents — perhaps on the order of 30 percent from the top of
the market once incentives are factored in — it’s clear that they are
no longer a surefire bet.
“Nobody who’s got anything under construction is kidding anybody by
not admitting that rents are less than where they were when we all
underwrote these transactions,” said Veronica Hackett, cofounder and
managing partner of the Clarett Group, a developer of condos and
rentals that began leasing at the 490-unit Brooklyner at 111 Lawrence
Street in Downtown Brooklyn a month ago.

From the October issue: Back in 2006, when Glenwood Management began assembling parcels on the
eastern edge of the then newly rezoned Hudson Yards district to make
way for Emerald Green, it knew the project would have plenty of company
when it opened. Thousands of high-end apartments in several massive
rental projects were slated to hit the market in the emerging
neighborhood at the same time or soon after. What they didn’t anticipate was the mess of a market they’d be entering. The 24-story, two-tower building, located at 320 West 38th Street, has
just begun renting its 569 apartments, not long after the release of a
quarterly market survey declaring the past year a disaster for rentals. more

In a tough market when roughly 1,500 new Manhattan apartments are
coming to market, landlords plan to keep offering prospective renters incentives, including free rent as well as free amenities from health club memberships to storage space to transportation services.
Months of free rent are being offered on the West Side, where a number
of buildings are under construction within walking distance to the Port
Authority and the High Line. Tenants at Emerald Green, Glenwood
Management’s newest residential development at 320 West 38th Street,
can get one month of free rent on a 13-month lease, as well as payment
of brokerage fees.
At Hudson Yards, a Rockrose Development at 455 West 37th Street, tenants
can receive two months free rent, according to the building Web site.
[more]

Silver Towers at 42nd Street and 11th Avenue began renting in May.

Nothing beats free stuff. That may be the lesson learned from Larry Silverstein’s Silver Towers at 42nd Street and 11th Avenue, which is leasing up faster than expected after offering two months of free rent to new tenants. When the two 60-story glass towers began renting in May, Silverstein wondered aloud in the New York Times how he would lease up the largest and tallest rental project in the history of New York in the midst of a deep real estate slump. “I’d be lying if I said I wasn’t scared when we opened,” Clifford Finn, the managing director of new development marketing at Citi Habitats, who is heading up leasing at the project, told The Real Deal. “You open it when the market is declining, and have to wonder how we’re going to fill 935 market-rate apartments.” [more]

From the August issue: Superlatives surround attorney Robert
Ivanhoe, who heads the real estate practice at the global law firm
Greenberg Traurig. He helped secure financing for Silver Towers, the
massive new rental by Larry Silverstein on West 42nd Street, and he
shepherded Tishman Speyer’s mega $5.4 billion acquisition of Stuyvesant
Town a few years ago. In fact, his firm is involved in about a third of
the city’s commercial deals. But his 300-square-foot mid-floor office
is relatively modest. “We try to be egalitarian and cost-conscious
about space,” Ivanhoe says. “This is about as nice as it gets here.” Click here for a snapshot of Ivanhoe’s office. Note: Correction appended
[more]

Two rental complexes on the West Side of Manhattan are slated to start leasing, adding hundreds of rental units to the market. Leasing at Stellar
Management and Chetrit Group’s Columbus Village complex, which has 710
units in five buildings, is expected to start this month. Rents in the
complex, which stretches from 97th to 100th streets between Columbus
and Amsterdam avenues, start at $1,895 a month for a studio. And Larry
Silverstein’s two 60-story towers — comprising Silver Towers at 600 West 42nd
Street — will add 1,042 market-rate and more than 200 affordable
apartments to the market. Market-rate rents start at $2,300 a month.
When asked how he planned to lease all the units, Silverstein said,
“Beats the hell out of me … I’ve been asking myself [that] for weeks.”
Silverstein also said that people are always moving to the city, and
there has never been a surplus of rental housing. [Post] and [NYT] [more]