Manhattan apartment landlords increasingly gut renovate buildings in pursuit of higher rents
The white-hot rental market and the shifting demographic of renters has compelled more New York City landlords to invest in extensive renovations of their rental properties, according to the Wall Street Journal. Landlords of apartment buildings that are 10 to 30 years old are spending millions to gut renovate well-located buildings and raise rents 10 to 40 percent.
For example, as The Real Deal previously reported, Silverstone Property Group is completely renovating the 128-unit rental building it bought earlier this year at Second Avenue and East 28th Street. It is gutting units, adding a courtyard with Wi-Fi, a sun deck and an amenity room. Once completed Silverstone plans to charge $4,000 per month for a one-bedroom apartment, which is in line with new developments in the area, according to Citi Habitats’ Clifford Finn, who was tapped to market the units.
The Journal lists at least five more similar properties undergoing major upgrades.
Renters sometimes prefer renovated older buildings to their newer counterparts because they feel the construction was more sturdy in decades past.
In today’s rental market from Citi Habitats, which The Real Deal reported set another new price record in April and features older tenants waiting until their middle ages to settle down, those renovations can have an immediate impact. A $5 million to $10 million investment can yield an immediate 10 percent to 12 percent jump in rents, according to Rose Associates. [WSJ]