With Sales Sluggish, Building Gets Aggressive
A 23-story building on the Lower East Side is taking aggressive steps to woo potential residents, offering incentives of nearly $19,000 for a top-floor unit, including a month of free rent, no brokerage fee, free moving services, and a year of free storage space.
"We've seen lots of amenities over the years, but nothing this outrageous," the chief operating officer of the Real Estate Group, Daniel Baum, said.
The Ludlow, at the corner of Ludlow and Houston streets, has been on the market for nearly five months and is about 50% occupied.
"This building is in an interesting position for the neighborhood," an executive vice president of rentals at Prudential Douglas Elliman, Yuval Greenblatt, said. "It has a lot of inventory in an area that doesn't have luxury high rises, [and] the prices are higher than the average."
The sales director for the 243-unit building, at 188 Ludlow St., Scott Taylor, said the incentives, begun last month, "put us one step above the rest," especially at a time when "people are fearing layoffs and not being able to afford apartments like these."
The developer of the Ludlow and chairman of Edison Properties, Jerry Gottesman, also owns Manhattan Mini Storage and is using the company to provide free storage space for the residents, as well as the free moving services. It is a "completely synergistic" arrangement, the vice president for marketing at Edison, Stacy Stuart, said.
The value of the incentives depends on the rental unit, but the savings on a two-bedroom apartment on a high floor, for example, are nearly $19,000. A resident of the $6,230-a-month unit would save the 15% broker's fee of $11,376; a one-year rental of an 80-square-foot space at Manhattan Mini Storage, valued at $804, and one month's free rent.
Listings on the the Ludlow's Web site show studios starting at $2,875, one-bedrooms starting at $3,950, and two-bedrooms starting at $5,480. The building is outfitted with the kinds of amenities found more frequently at developments in Chelsea, including a roof deck, studios for yoga and pilates, and a multimedia and billiards room. Apartments have white-oak flooring, granite countertops, Kohler fixtures, and washer/dryers.
The new incentives have attracted "people downsizing from large condo buildings," Mr. Taylor said. "They can get a smaller apartment, but keep their skis and snowboards in the storage space." The five-person sales team is aiming to finish leasing by the end of May, he said.
The prices at the Ludlow are a significant premium on median prices for the neighborhood, where the average in December was $1,495 for a studio, $2,699 for one-bedrooms, and $3,633 for two-bedrooms, according to Citi Habitats. Many of these neighborhood buildings, however, are walk-up tenements that lack the amenities of the Ludlow.
Two comparable new developments in the East Village, not far from the Ludlow, are Avalon Chrystie at 229 Chrystie St. and Avalon Bowery Place at 11 E. 1st St. Both buildings have similar prices to the Ludlow.
While sales have been sluggish at the building, it is not clear whether they are indicative of a larger slowdown in the rental market. The Ludlow began marketing the units during the slowest time of year for rentals; the majority of all rental leases change hands between May and September, according to a vice president at the Corcoran Group, Paul Gavriani.
"You have to wait until the summer to compare how the market is doing," Mr. Gavriani said. "It could just be the timing and type of product for the neighborhood."
