looking for 1-2 bed w/d and pool below $3300 in fidi and 900-1200 sqft

Oddly, I'm going to go with avenueb on this one.
You want 1000sq ft in a luxe building with a pool, for $3300?

Thats $39.6 per square foot, in a luxury building.

My feeling is you could actually get your price, but not until October. This is the beginning of the peak rental season. Even fairly desperate owners (which does NOT describe a professionally managed building) should be able to hold on until September, when they will slowly become confident that the next out-of-towner with 1 day to rent an apartment and no idea what the market looks like has actually disappeared.

Let us know if anyone bites on your offers!

-DT

http://downtowny.blogspot.com

avenueb: i'm a bit confused...i know a lot of people who bought in the speculative boom years, with the hope to flip for a quick profit. They took a risk that the market would turn against them, hoping for a continuation of the housing/lending bubble. They were willing to take that risk. Unfortunately, the market turned against them, and now they need to make a decision. Either take a small loss on their investment, or wait for the next round of economic growth. I can't predict the future, but if i were a betting man (which, i am) i would bet that this economic depression / recession will last for at least 1-2 years (getting worse than it is right now) before the government sponsored stimulus will BEGIN to spark real economic growth. The massive loss of jobs in the financial sector will (has already?) "trickled" downstream to many sectors of the economy, and Real Estate is just one of them. I agree that in 10-15 years, buying now will have been a good investment...but i would bet that buying 1-2 years from now will have been even better. In the meantime...i see THOUSANDS of empty apartments. EMPTY. I am aware of the basic tenants of supply and demand. When supply is greater than demand at a specific price...price must adjust in order for demand to meet the supply. I'm sorry if you made a poor timed decision to invest in real estate during the past few years. I really am. But now is the time to be a man (or woman) and pony up on your ill judgement. I know it hurts to make a bad investment, and it really hurts to "realize" a loss. But the loss has happened. And to show how sorry i am, i am here to help an owner who is sitting on an empty apartment. I will help them float their investment for a year and only take a small loss. I think i'm actually helping.

TW- perhaps you need to add a disclaimer in your postings going forward: any responses from those who have serious anger issues --ah hem, avenue b-- your feedback is not necessary. On a more serious note, I agree with Downtownster (Oct) and actually felt a sense of relief that TW's started a conversation that's been long overdue. If you're thinking about renting in the aforementioned situation, my advice is to communicate directly with the owner, and most importantly, eliminate any third-party. Best of luck and thanks for your insight!

Dear becity,

Where are you from and how did you end up in NY? Average grades at a state school somewhere in the south? West? Midwest? Entry level position at AIG or Lehman sometime in the last ten years? Let me guess, shared an apartment in Murray Hill with your college roommates until, oooh, I can FINALLY afford a studio in the Financial district! Oh wait, they call it FiDi now! It's like SoHo! And I can walk to work! And there's a J Crew! They even have a Brooks Brothers down there now! Oh wait, is that a Hermes? No WAAAAY!!! I can buy ties without leaving my neighborhood!

Go home.

has anybody actually heard of any large number of college grads who will be moving into the city? I know that seasonals suggest that we should expect an uptick, but with all the banks firing rather than hiring...i just don't see a source of employment for any of them.

Take a look at the history of 50 Lexington and 300 East 93rd Street (among others). When developers run into troubles, the first thing they do is not finish the pools and gyms. And a pool is a very expensive amenity because you have to have a lifeguard: good chance that even if you find a building with a pool, it won't end up being open the hours you want to use it. Remember, if they are desperate enough to lower rents, they won't have the $ to operate all the things they intended to when the plans first came out.And it's probably going to be even worse in the Condos than the rentals, because in the rentals they will have promised amenities to renters and the renters can hold them to it, but if all the condo owners vote to do away with an amenity, it' their right to do so and odds are that's exactly what they will do rather than raise common charges.

I'm a small-scale landlord (not in NYC tho), who has several different property managers working for me, and I can tell you that leaving units empty is sometimes the best decision, rather than renting at a discount.

"I feel like I'm doing these people a favor by offering them some rental income" doesn't always play well in real life for the property owner. Lower rents often mean more problematic tenants, certainly lower income tenants, perhaps with less secure jobs. Investors with sense and good management (and some luck!) do not get super desperate. And vacancy is put into the formulas for investing, it's part of the cost of doing business, just like building maintenance.

A discounted rent gets locked in for a long time and it can be better to wait and get full or higher rent. That's why those units sit empty.

As far as speaking directly to the owner, that's hard to do and probably won't help. I hire property managers so I don't have to deal with tenants. Most PMs protect the owner's identity. But sure if you know how you can probably track down the owner, who is in touch with her PM anyway and will just refer you back to the PM.

I hope you find your dream apartment, there's nothing wrong with seeking it!

avenueb
about 7 hours ago
They even have a Brooks Brothers down there now!

Um, while not as old as the Madison Avenue store, the BB store in the financial district has been there a long long time.

Fluter - i agree with your points. i think that is why attempting to structure a net rent of 3200, but a gross rent of 4000 or 5000 is totally doable. A number of rental buildings are giving 3-4 months free to bring down the net effective monthly rent (2 gold and 95 wall come to mind). I really feel like the solution for the condo building unit owners (be they individuals or corporations) is to go the same route. If you want 4000 or 4800 for your apt....you are going to need to give 3-4 months free rent on a 15 month lease. It keeps the public numbers high, while bringing the net rent down into a realistic level where supply will equal demand. Nothing beats simple economics. Its sortof like the laws of physics. I just wish the brokers and PM's would realize this. Its frustrating when dealing with people who don't understand the dynamics of the new market. I think i'm going to write a piece for the NY Times. I know that these boards are great, but they don't get read by enough people. A story on drudge or the times should reach the proper audience.

fluter, i'd usually agree with you but the oversupply is so large that warehousing will not be an option, certainly is not an option for the condo purchaser who only has that apartment that he/she can't afford.

tomwilsing, usually holding out for the lower rent makes sense. as i seriously doubt that rental prices will be on an upward projectory, particularly for the type of apartment you look for (although some posters have been incredulous that you could want so much for so little, the lower-high-end market, i.e. young well-paid professionals, is going to be the hardest hit, no demand). i'd go ahead and get the rent concessions, be prepared to move at the end of the lease term if you must, and wait for the rest to fall. your problem at this moment is that you are looking at units owned by individual investors, who are busy chasing the market down. when more developers/banks need to find occupants for large blocks of units is when the rental fun truly begins. patience would be a virtue, or at least a savings generator, here.

Tom: my experience is that it is more conducive to find the "properly-priced" apt right when it comes onto the market. The rental inventory you are seeing is all the over-priced stuff that didn't rent. The well-priced stuff rents in a couple of weeks. Eventually, there will be someone who cries uncle and drops the price, or maybe it's a new listing: you want to set up your SE search and auto-updates for when this happens. Until then, your attempts will probably be futile: how would you respond if someone were offering 30% less on your apt, especially given that you are in-line with all the other apts on the market (i.e., the over-priced, not-rented ones), especially given that you bought at the peak, have a mortgage that was already putting you in negative carry, and here comes some a-hole telling you that you need to be in the hole for another $1K a month? You'd probably say FU!

I'm not saying they're right, but there it is. Much easier to wait for an owner to see the light on their own accord (ge'ez, maybe if no one has rented my place after 8 months on the market, maybe the price is to high): less frustration for all involved.

BTW, have any of these places rented for the price you want before (from the SE history)?

inonada - very few apts have rented for the prices i am asking, but once again, if the owner structures the deal properly, they will never show up. Lets say at the boom a beautiful 1.5 bed 1.5 bath with w/d, pool, ect would rent for 4800. Now lets imagine the clearing price for that apt is really $3,200 (all 600 of them...are you listening 20 pine, 15 william, 2 gold, 15 broad, 95 wall, ect...). If the owner wants to hit this clearing price without anybody but the renter knowing...they can offer 5 months free on a 14 month lease (37% discount). I really think this is the way to go for a desperate owner. Sure, not all owners are desperate, but i know some are out there, and i'm willing to bet that there are more desperate owners out there that don't even realize how desperate they actually are. I'm talking about living in denial. I'm really trying to educate these people (while at the same time procuring some nice new cheap diggs for myself). Otherwise, the doomsayers about builders going bankrupt and defaulting on construction loans are going to be proven correct in the long term...perhaps even the near term.

There are many reasons the vast majority of the developers are not yet in a position to rent. it's not doomsday reporting, it's the natural cycle of residential condo development as it exists.

What you say is perfectly logical, Tom, but realize that the purchasers of these apts bought despite the negative carry, even accounting for reasonable rates of rent increase, because home prices always go up. The idea that rents can only go up around 3% per year because the Fed keeps a tight watch on that number (40% of CPI) and that the carry won't ever make sense was lost on them. They bought at the peak despite all the obvious signs of the bubble: heck, NYC was late to the blow-up, and the preview was playing out in the rest of the country a year or two ahead, yet they still plowed ahead. And you expect these people as a group to listen to the voice of reason? I don't think so. So what'll make them come around? Probably cold, hard time. Lowering the rent to the clearing price admits their mistake, which may be a more bitter pill to swallow than the money itself. And I'm not sure they'd like that bitter pill shoved down their throat by some stranger trying to "take advantage" of the situation because they're "not desperate."

Do feel free to keep trying, and I'd be curious to hear about your success.