Investors turn attention to Manhattan walk-ups

TRD New York /
Aug.August 22, 2012 09:30 AM

Rising rents are fueling demand for previously overlooked Manhattan walk-up apartment buildings, according to the New York Times. Seventy-one such properties sold in the second quarter of this year, a 115 percent increase from the same period in 2009, Eastern Consolidated research shows. And as prices rise, sales volume has increased even more dramatically: $640 million worth of properties traded hands in the first half of this year, up 205 percent from the same period three years ago. 

These properties are often occupied by at least some rent-regulated tenants, who have actually helped buoy investor interest in the sector. For landlords, they are an indicator of large profit potential, while for lenders who finance the acquisitions they are a sign of safety — building income literally can’t get any lower. As a result, buyers of these properties can often secure mortgage rates of less than 3 percent, compared to as much as 8 percent for new developments.

Ironically, while rent-regulated tenants may help seal the deal, the new landlord immediately begins trying to replace them with market-rate renters.

Simultaneously, landlords upgrade market-rate units in order to increase the rent roll. “We think that there are a lot of potential tenants who are coming out of high-end rental buildings with doormen and elevators that are looking for a similar feel but at a more affordable price,” Silverstone Property Group President Martin Nussbaum told the Times. [NYT] — Adam Fusfeld


Related Articles

arrow_forward_ios
(Chart by Miller Samuel)

Cautious buyers are pushing up Manhattan rent prices

Manhattan rental concessions keep growing — especially in new dev

Manhattan rental concessions keep growing — especially in new dev

New York’s most expensive* rental is a One57 unit asking $125K per month

New York’s most expensive* rental is a One57 unit asking $125K per month

Daun and Peter Hauspurg and ABS Partners Real Estate offices at 200 Park Avenue South (Credit: Twitter and ABS Partners)

They ran a brokerage, now they’re sourcing deals. Why Daun and Peter landed at ABS

Eastern Consolidated’s Mark Schnurman to head sales at Eastern Union

Eastern Consolidated’s Mark Schnurman to head sales at Eastern Union

Peter Hauspurg and Daun Paris resurface at ABS Partners

Peter Hauspurg and Daun Paris resurface at ABS Partners

HKS hires former Eastern principal to launch new i-sales division

HKS hires former Eastern principal to launch new i-sales division

Lee & Associates brings on Eastern Consolidated broker for newly created investment sales division

Lee & Associates brings on Eastern Consolidated broker for newly created investment sales division

arrow_forward_ios
Loading...