Foreign Investors Pour Funds into High-End Rental Properties in Manhattan
While the thought of paying almost $20,000 a month for rent might bring sticker shock to some prospective tenants, high-end rentals are becoming increasingly common in Manhattan. Recently, a two-bedroom condo at upscale Stella Tower was sold for a cool $5.35 million and then quickly listed as available for rent at just shy of $20,000 per month. As surprising as it might seem, such a quick turnaround of properties is notthat uncommon in Manhattan, where properties are highly sought-after and well-heeled tenants are more than willing to shell out surprisingly large sums for luxury condos. The ability to fill such properties is also serving to attract investors who are drawn by the strong rental demand. Consequently, an increasing number of properties in many of the newly developed buildings in Manhattan are now listed for rent within three months or less of the properties selling.
Overall, investors in New York City are looking forward and banking on property purchases as a long-term investment strategy. No longer are investors looking for a quick exit strategy, but instead they are looking to invest in the longterm. No longer are investors interested in flipping properties, but instead they are focused on capital preservation.
Rents in New York Setting Records
Although $19,500 a month for rent might sound incredible, the uber luxury condo at Stella Tower listed for that amount is actually not the most expensive property for rent in Manhattan. A two-bedroom in Midtown rented last year for $45,000 a month, according to the New York Daily News. Located at One51, the property features 2,000 square feet of space and faces Central Park.
Despite the addition of high-end properties to the Manhattan real estate market, rent growth within the luxury sector has remained relatively unchanged and is still hovering at just under the $8,000 a month mark. As the high-end demand in Manhattan increases, the luxury home supply is dwindling. In fact, brokers have found that it is now a struggle to locate properties to show clients who are in the market for a property that is merely luxury. Some brokers have even resorted to sending out mass mailings to townhouse and condo owners to try to entice owners to consider selling.
In the last few years, Manhattan has entered a boom in terms of the purchase of ultra-high-end condos that has served to attract wealthy investors from around the world, shattering sales records. Previously, foreign investors were often driven by the chance to own an opulent apartment in one of the most cosmopolitan cities in the world. Today,that has changed and an increased number of buyers are now searching for a secure place to invest their cash in a world that has become increasingly uncertain.
Flush with cash, these buyers have found that the United States is an excellent location for minimizing risk and condos, which tend to be in short supply in Manhattan, are now in high demand among this demographic.