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New York

Many luxury condo units will become rentals: LeFrak (VIDEO)

Developer says there's a "bit of a bubble" in NYC's top-tier market

Dynastic developer Richard LeFrak predicted that both condo prices and rents in New York will flatten or fall in the near future.

“I’d be a little concerned if I were selling high-end condos,” LeFrak told Bloomberg in a televised interview. “The top end got overbuilt, and that may be a symptom of a bit of a bubble.”

Just over 5,000 new condo units are set to hit the sales market this year, the most since 2007, according to data from the Corcoran Sunshine Marketing Group, reported by Bloomberg.

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The effect, LeFrak said, would carry over to rentals.

“New York rents are probably going to flatten out now,” he told Bloomberg, “And you’re probably going to see some of the condominium inventory turn into rental inventory.”

Land values, he said, would eventually drop as well. LeFrak is one of the city’s largest developers, and came in at 76th on Forbes’ latest list of the 400 richest Americans, with assets valued at $6.1 billion.

Of the national market, LeFrak told Bloomberg, “The rental apartment business has been unbelievably good, and it’s going to continue to be good.” [Bloomberg] — Ariel Stulberg

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Richard LeFrak