On a recent Wednesday afternoon at the Eugene, residents scurried through the lobby’s revolving door, eyes glued to smartphones, bodies draped in fitted cloaks emblazoned with all the right brands. Handbag-sized designer dogs trotted alongside.
Lei Pan reckons that 80 percent of the market-rate residents at the building are from China. He gestured toward a backpack-sporting college student as he crossed the lobby of the Far West Side property. “He has a million dollars in cash in his apartment,” Pan said.
He’s in a position to know. The broker and his business partner, Sunanne Zhu, have brought about 100 college students to the Brookfield Property Partners’ tower, capitalizing on a network of wealthy Chinese teenagers and 20-somethings Zhu started building three years ago — her own, nearly private corner of the Manhattan rental market that she controls from her smartphone. Zhu claims she has brokered more than 1,000 leases for students at Manhattan’s tallest and most expensive rental buildings, including Moinian Group’s Sky, Extell Development’s 555 10th Avenue and the Durst Organization’s Via 57, where youth of means flock in search of the shiniest new accomodations. After a year, the students look for the next best thing, meaning more business for both the landlords and Zhu. Her rolodex is a godsend for these developers, who’ve brought product into what many describe as a luxury rental glut, a market defined by generous concessions. At the Eugene, monthly rents can hit north of $10,000 a month for a three-bedroom, which is not a problem for the top tier of Zhu’s clients, so-called “fuerdai” who get a $50,000 monthly allowance from their wealthy Chinese parents.
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“The rich people always say, ‘no budget,’” Pan said. “So if they say ‘no budget,’ that means they’re very good clients. So you just show them the best.”
If you build it
When Brookfield set out to build Midtown’s tallest rental, it chose Manhattan’s Badlands, the windy and desolate zone of Hudson Yards, which is now shaping up to be the city’s premier office district. In other words, the building, though stacked with every possible amenity, is still a hard sell for the seasoned Manhattanite, whose idea of luxury rarely includes a home just off of the Lincoln Tunnel.
“The challenge is just that a lot of product is coming in at the same time,” said Jonathan Miller, CEO of appraisal firm Miller Samuel. Manhattan’s high-end rental market has been in a funk for a year-and-a-half now, he said, and 54 percent of new development rental units here come with concessions, on average about 2.4 months rent. With over 5,600 new market-rate units expected to hit the Manhattan market in 2018 – up from 4,270 in 2017 – according to Citi Habitats, the trend is likely to continue.
Leasing a massive rental tower like the 844-unit Eugene in such a market is a daunting task. “The larger the number of units in a location, the more you have to absorb,” Miller said. “That makes it challenging when it’s an emerging neighborhood.”
Earlier this year, Brookfield said 74 percent of the building’s 675 market-rate apartments were leased. The numbers might not have been as rosy without Sunanne Zhu.
“Of course,” Pan said, “they are lucky.”
Zhu and Pan, both 30-something natives of Shanghai, met in college there. Pan moved to the U.S. in the early 2000s, and Zhu followed about five years ago. At first, she tried selling insurance, but struggled to compete against agents with decades of experience and a large network of clients.
Around that time, a growing number of Chinese immigrants were looking to buy homes in Flushing. Zhu decided to enter what looked like a booming business. In 2013, she joined Fultonex Realty, a Flushing-based brokerage run by Bill Seto. New agents at the firm are expected to choose a niche within two months, and Zhu picked luxury student housing.
“A lot of people have tried to break into it,” Seto said. “It’s not that easy.” Pan followed Zhu to Fultonex a year later. Their first success was Durst’s Helena, a 598-unit rental building at 601 West 57th Street.
Zhu managed to find clients in part through WeChat, the Chinese messaging app. At any given time, her WeChat group has 5,000 members, according to Pan. The network allows for easy referrals — as long as the herd works in your favor.
“WeChat’s a big deal, but that can destroy you too,” Seto said. “One unhappy tenant can just poison the rest of the group, because everyone follows each other.”
Seto rarely sees Zhu nowadays. She spends her days in Manhattan and makes weekly visits to the Flushing office to pick up her commission checks (in March, traditionally a slow month for rental leasing, she picked up 40). Seto gets occasional thank-you notes from grateful developers.
“For a girl her age, the number is phenomenal that she makes,” Seto said. “When I tell other agents, they say ‘yeah come on Bill, you’re joking, right?’”
Zhu says she leased up around 500 apartments last year, including 140 leases at Moinian’s Sky. This year, she and Pan have done over 30 deals at JDS’ American Cooper Buildings on First Avenue and are on pace to eclipse their 2017 leasing volume.
Zhu and Pan don’t charge their renters. They make all their commissions from the developers themselves, usually a full month’s rent. The students do, however, occasionally show their gratitude. Zhu said she got some nice lipstick recently.
“Some clients give us gifts and it’s from their parents’ company in China,” Pan said.
Zhu regularly arranges for airport pickups for students, helps them find furniture, and works with them on many other aspects of moving to the U.S. Seto pushed his nose up with his finger when describing her clients. “You really have to deal with their personalities,” he said. “But she knows how to cater to them and she won their trust.”
“We have to babysit every client,” Zhu said. “So I need to do it person by person.”
Wendy, a resident of the Eugene who was walking her dog on West 31st Street, scrolled through Zhu’s WeChat group on her phone. She moved into the Eugene with her daughter who is attending school in New York, and said she was more familiar with the Manhattan real estate market than most of her neighbors, having obtained a green card after investing in a Midtown development through the EB-5 visa program.
“I don’t remember which one,” she said.“The Diamond-something, I think.”
Pan said that when he and Zhu got started, some agents at luxury towers would look down at them — perhaps, he speculated, out of bias, or because they had bad experiences with Chinese agents in the past.
“In the beginning lots of buildings treated us very badly,” Pan said. “They think Asian agents sometimes want to cheat you.”
The duo would show up with 20 students at once to view apartments, violating building rules that limited showing to only one or two clients at a time. “But later, we made lots of deals and they changed all their policies,” Pan said. “Now they say, ‘if you bring 20 people, I’ll give you a party. I’ll offer you champagne.’”
A representative for JDS confirmed that Zhu brokered several deals in the building but declined to comment further. Representatives for Brookfield didn’t respond to requests for comment, nor did representatives for the Moinian Group. Dan Mogolesko, Durst’s head of residential leasing, said in a statement that “Sunanne is an integral part of our rental ecosystem and over the years has introduced us to her extensive international network. She was instrumental in the lease ups of VIA 57 West and EOS.” Extell’s Anna Zarro would not comment directly on Zhu, but noted the “opportunity for us to work with a variety of brokers, many of whom who represent clients from around the world.”
For now, Zhu and Pan have the rental market for wealthy Chinese students cornered. But they sense threats from some of their former clients, who upon graduating from college sometimes decide to become agents themselves and try to tap into the WeChat network. Getting a job can be hard for foreigners, and the brokerage industry’s barriers to entry are low.
They try to stay ahead through sheer grind. Pan, who says he works 12 hours a day, seven days a week, describes himself as the lazy one. He leaves answering messages to Zhu, whose phone buzzes with WeChat messages throughout the day and who stays up late into the night to do paperwork.
When asked if she was surprised at how successful she has become, Zhu said “No.”
“I’m working every day,” she added. “Rainy, windy, every day I’m working.”