“It’s every broker’s dream,” says Brown Harris Stevens’ Lisa Simonsen.
Simonsen is referring to 800 Fifth Avenue, the building that Miki Naftali agreed to buy from Eliot Spitzer for over $800 million last March with plans to develop what will likely be some of the city’s most expensive condos ever.
But in this case, she’s not talking about the future Robert A.M. Stern-designed homes set to grace the prime stretch of real estate along Central Park. Instead, 208 rental units in the existing faux-limestone hulk of concrete, filled with wealthy tenants who need to move out in the next several months before their leases expire.
“There is a sense of urgency,” Simonsen said. “As brokers, often we may work with people for a year or two years or even longer. Whereas this is, you know, ‘tick tock.’ Everyone here has a very loud clock.”
The clock started when Naftali went into contract to buy the property last year, with plans to partially demolish it and replace it with a 26-story ultra-luxury condo building. The leasing office closed down last August, according to the building’s former leasing director Kelly Greer. Since then, residents have been winding down the time on their leases, with all tenants expected to move out by the end of the year.
Good cause eviction laws likely don’t apply here, given the building’s rental prices generally seem above the threshold at which a landlord can vacate a building, as The Real Deal previously reported.
“As new owners of 800 Fifth Avenue, we have been in consistent communication with outgoing residents throughout this transition,” a spokesperson for the project said in a statement. “We are making progress toward our investment in the building and look forward to sharing more about our vision for this property.”
First time for everything
For many in the building known for its park views, it’s the first time they’ve had to move in decades. Now, the wealthy tenants of 800 Fifth are flooding the one of the most competitive submarkets in the city in recent years.
“There’s nothing,” said The Agency’s Michael Birlya of the Upper East Side. “The rental market is insane, the sales market is really picking up.”
Birlya gave the example of a flexible four-bedroom asking $2.9 million on 84th Street and Third Avenue. Last year, it brought in a handful of offers under asking and the owner decided to rent it out; this March it scored a contract over asking price in its first weekend back on the market.
The rental market is even more of a challenge, and the self-imposed constraints from residents haven’t made it any easier to navigate (Serhant’s Lisa Taubes said she couldn’t get her client “east of Park Avenue if I paid her”).
In that tight rectangle bounded by 60th Street to the south, there are just 21 apartments available to rent, according to StreetEasy. (There are also townhouses going for north of $50,000 per month).
Two of the available rentals are at Fasano Fifth Avenue, a private members club with 12 apartments billed as short-term, turnkey luxury rentals. One of Simonsen’s clients from 800 Fifth scooped up one of the units there for $175,000 per month, a step up in price from the large three bedroom they had for under $30,000 per month previously.
Developed by Bernard Spitzer in 1978, the apartments at 800 Fifth were once considered the crème de la crème for rentals on the Upper East Side. And while rents stayed plenty pricey, the rest of the luxury market zoomed ahead, with ultra-luxury offerings like Fasano or new development condo owners renting out their homes for triple or more the going rate at 800 Fifth Avenue. In December, an apartment at The Benson, a boutique condo at 1045 Madison Avenue, rented for $95,000 per month.
“I personally have never seen prices where they’re at,” said one of the listing agents on that unit, Douglas Elliman’s John Giannone, at the time.
Neither, apparently, have the tenants of 800 Fifth.
Taubes’ client from 800 Fifth initially wanted to rent before learning what it would cost to maintain her lifestyle, which involves a “very large apartment” with views from the 35th floor.
“I told her that her rent would be $12,000 to $15,000, and she was like, ‘Oh my God, I thought $8,000 was a lot,” Taubes said. “I am not paying that.”
Even then, Taubes said they lost out on an apartment at 1015 Park Avenue before eventually finding a two-bedroom, two-bathroom at 870 Fifth Avenue on the second floor for $1.7 million. “She initially didn’t want a low floor, but she is on the low floor,” Taubes said.
Others are still on the hunt, like Elliman’s Alexander Boriskin’s client. “The rentals are pretty though,” he said.
“She’s been in the building for so long, she said, ‘I love the area, so maybe I should buy at this point,’” he added.
The tough market hasn’t deterred brokers from trying to get in on the exodus.
Taubes said she sent out mailers to all the residents of the building, knowing that everybody is in the spot — out by the end of the year.
“Unfortunately, when I sent out my marketing material, nobody answered me,” she said.
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