When rental building owners and agents play Santa

New York /
Dec.December 17, 2008 04:00 PM

Forget the $5 stocking stuffer. This holiday season, a number of rental building owners and brokers are offering $300 and $500 gift cards to new tenants, and even current residents who refer a new client.

This may have been the way of condo owners, but now rental owners have honed in on the action. They have learned that in the slow season, particularly in this down market, playing Santa is one way real estate players can drum up business.

“Traditionally, as the holidays ring in, the customers check out,” said Douglas Wagner, president of sales and rental residential brokerage firm Benjamin James, which offered $500 Visa gift cards to anyone who signed a one-year lease through the firm during a two-week period last month. “Part of our promotion was a management effort to capitalize on whatever business there was out there.”

A number of other companies have caught on to the idea.

“Need a little extra holiday cash?” read an email to residents of Archstone’s 12 metro-area buildings, who were offered a $500 rent credit if they referred a new tenant. Similarly, Stonehenge Management is offering a $500 AMEX gift card to residents who refer a new tenant, who signs a one-year lease at any of the company’s 18 Manhattan properties. New tenants at Manhattan Park, an 880-unit development on Roosevelt Island, will receive a $300 AMEX gift card at signing. At Manhattan Park, rents for one-bedroom apartments start at $1,795 a month, and go up to $4,695 for a three-bedroom apartment that can be converted into a four bedroom. The company refused to say what the current occupancy rate is.

Some use the gift cards as a reward for not bringing a broker to the table.

Brian Baker, Manhattan Park’s director of leasing, said the promotion applies to clients who see the company’s ad on Craigslist and who rent without a broker.

“It’s hard for the broker, but it’s a win for us,” he said.

But at least one senior associate broker at Citi Habitats, Mark Eidgah, is offering a gift card himself, as a way of standing out in the competitive rental market. Eidgah is promising a $500 AMEX gift card to the person who rents one of his listings, a four-bedroom penthouse apartment in the West 60s that is going for $19,500 a month, down from the original asking price of $22,000 a month, four weeks ago. Eidgah began offering the gift card when the apartment had been on the market for two weeks, and he is also offering a $250 gift card on a three-bedroom unit in the West 90s that is asking $6,800 a month.

Neither gift card will transform the client’s bank account, but the cards are a way for him to distinguish himself from other brokers, and hopefully attract clients, he said. “It’s a marketing tool,” said Eidgah, who took cues from landlords who offer incentives like a free month’s rent to attract tenants. “I thought, ‘Hey, if owners are giving this, why don’t I try this?'” he said.

Daniel Baum, COO of the Manhattan-based rental and sales real estate firm Real Estate Group New York said offering gift cards does not just line the pockets of prospective tenants, but provides another way owners can attract clients.

“That’s a nice creative way to get your tenant body to basically become your sales force,” he said.

But in the current market, not even the promise of extra cash is a cure-all.

Wagner, of Benjamin James, said the company decided not to renew its promotion beyond two weeks because too few customers came forward. “It’s a very quiet market out there,” Wagner said. When it came to identifying new clients, he said, “We learned that there aren’t that many out there.”


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