Edward Mermelstein has seen a lot of trends since he entered the world of real estate in 1989. But the recent rise in wealthy individuals and first-time renters moving into the luxury lease space is a new one.
“New York City is seeing more activity in the luxury rental markets. This interest is unprecedented and primarily driven by uncertainty about where Covid-19 is going and other concerns about financial markets, politics and taxes,” he said.
Mermelstein, a real estate attorney and founder and CEO of One & Only Holdings Inc., a New York-based advisory firm that caters to high-net-worth and celebrity clients, noticed the uptick in high-end leases in December.
As of May 26, One & Only Holdings Inc. had processed more than 20 leases for the month, compared to one to two leases a month in the preceding 13 months.
“As other parts of the country are becoming more expensive, New York and San Francisco have become more affordable, and people are taking a second look, especially younger folks,” he said.
Many of Mermelstein’s clients are paying $50,000 to $75,000 a month to snap up some of New York’s most luxurious and expensive inventory in swanky buildings that provide lavish living to titans of industry and some of Hollywood’s biggest celebrities. In addition, he said, sellers are more open to renting.
Mermelstein said a 5,004-square-foot apartment with four bedrooms and four-and-a-half bathrooms at Tribeca’s famed, “paparazzi proof” 443 Greenwich Street recently rented for $60,000 a month. Not your average New York City walk-up, the converted building — originally designed by Charles C. Haight as a warehouse for a book bindery in 1883 — features residences with private elevator entries, doorman and concierge services, a full-time valet, a live-in manager, a landscaped roof terrace, a 75-foot indoor swimming pool, a Turkish steam bath, a fitness center and wine storage built into every residence.
Similarly, a 4,613-square-foot apartment at 520 Park Avenue with four bedrooms and five-and-a-half baths recently leased for $75,000 a month. The 54-story tower is located on the Upper East Side of Manhattan and was designed by Robert A.M. Stern. The building has a doorman, a concierge, a stunning 25-foot-high lobby, an 8,000-square-foot health club and a swimming pool with coffered ceilings and trellised walls.
While some clients lease with an option to buy, others are keeping their options open, cautious about the future, even while parts of the country are reopening.
“There’s a lot of uncertainty. People are wondering what the world will look like in New York City in June. People think that if there is a resurgence of Covid-19, do they want to be tied to a property when they can walk away from a rental,” he explained.
Mermelstein said he sees more than a few wealthy families from India, where Covid-19 numbers have spiked, looking to ride out the situation by securing luxury rentals in the U.S.
He expects the luxury rental trend to cool in New York during the summer. “Many people do not like to move in this weather,” he explained.