The Real Deal New York

Tapping that rental wellspring of college graduates

November 02, 2007
By Vanessa Londono

Before the college graduates come to the city, rental firms go to the college graduates. Companies like Urban Hostess and Citi Habitats visited campuses this past spring — to prepare them for a rental market with a super-tight sub-0.50 percent vacancy rate in Manhattan.

“College graduates really know nothing about the market and frequently get taken advantage of,” said Jeremy Abelson, president of Urban Hostess, who estimated around 20,000 graduates come to New York City every year.

Urban Hostess opened in April 2005 to serve as a middleman between Manhattan’s brokerage firms and young professionals entering a market with few options and high prices, and currently has about 10 staff members.

“We’re reaching college graduates through their own resources, using word of mouth rather than newspapers,” Abelson said. “It carries a thousand times the weight of an advertisement.”

Utilizing a grassroots approach, Urban Hostess spent as much time in the offices of career development as in the parties held by the company’s college-based interns, who received college credit through their offices of career services. Urban Hostess held promotional events at Michigan, Harvard, Penn State and Syracuse among other colleges and universities across the country.

“We are trying to integrate into the fabric of college life,” Abelson said.

Citi Habitats’ program involving outreach to college campuses began this year, said Cullen Hilkene, who started the program and visited about 10 campuses along the East Coast this spring.

“We’ve got a lot of kids at the universities feeding into New York,” Hilkene said.

In addition to going to college campuses, both Urban Hostess and Citi Habitats are establishing relationships with Fortune 500 companies, including JP Morgan, UBS and Deutsche Bank, to handle new recruits.

JP Morgan, who hires 500 graduates every year, relies on Urban Hostess to walk their recruits through the renting process, as does PricewaterhouseCoopers. Urban Hostess is also trying to branch out of the financial community, and is in the final stages of a similar contract with Disney and has a deal with WPP Group, the advertising and communications company.

In exchange for discount broker fees, Urban Hostess created a private co-branded relocation Web site for the new hires at JP Morgan and other firms, providing an apartment listing guide to prices and neighborhoods as well as a roommate connection service. JP Morgan recruits opting to use the service (they aren’t required to) have exceeded expectations, with 50 percent participating, said Abelson.

“We’ve seen nothing short of a tremendously positive response,” Abelson said.

New college graduates recruited at investment firms, law firms and consulting companies connected with Citi Habitats can be matched up through the firm’s corporate relocation program, which began five years ago.

The program gives the brokerage additional insight into what new college graduates are looking for in their first rental, said Hilkene.

He said many college graduates want to continue the community lifestyle of college when they move to New York. But that can be a challenge.

“The dorm environment doesn’t exist in New York and finding a loft that will accept a large group of professionals doesn’t happen very often,” Hilkene said.

Many times, brokerages will divide large groups and find them apartments of two or three people on the same floor or in the same building.

Money-strapped graduates often have to face the reality of not being able to live in their choice of neighborhood in a market where high rents are no match for their entry-level salaries.

“They are exploring neighborhoods they didn’t think of before,” Hilkene said. “The Financial District is very popular among young professionals who work in that area and can get a lot of bang for the buck.”

Of course, having a roommate saves money. In addition, Manhattan Apartments’ manager, Adjina Dekidjiev, said graduates with a co-signer or an extra month of security have better chances of landing the apartment they want.

The majority of college students rely primarily on the Internet, followed by recommendations from family and friends, to find city rentals.

With the growing attention on their specific needs, these graduates are realizing that finding a place to live in the city is not impossible, Abelson maintains.” We are resonating with them,” he said.

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