Investors bank on Manhattan rentals

Investors are paying sky-high sums for large Manhattan rental buildings, and many of them plan to maintain the properties as rentals rather than converting them to condos. Recent deals include BlackRock Realty Advisors and Patrick Freyberg purchasing 530 Park Avenue for $212.5 million and Stonehenge Partners buying a 90,000-square-foot rental at 330 East 63rd Street. “From a tax perspective, it doesn’t make sense to convert a rental building to condominium in today’s market with so much rental growth,” said Ofer Yardeni, a co-founder of Stonehenge. “Holding onto a ‘trophy’ rental building and riding out the future growth in the rental market will allow owners to benefit from capital gains tax versus ordinary income tax that these owners would incur in a conversion.” more [Sun]