This has been an exciting year for the New York City real estate market, with office buildings for the first time selling for more than $1,000 a square foot and investors from around the world displaying a strong appetite to own and manage rental apartments.

“Residential rental rates are on the rise throughout the city as condo-mania subsides,” the managing director of Eastdil Secured, Douglas Harmon, who is probably the most active investment adviser in the country, said. “Investment in rental buildings continues as interest rate spirals have yet to materialize (we may be in extra innings with rates, as the 10-year treasury note is once again under 5%), and that keeps some insatiable hunger in the investment community.

“New York has never been stronger from a rental housing perspective, and new rental developments have been limited over the last few years,”he said.

Rental buildings with a high percentage of regulated units are becoming harder to find, the chairman of Massey Knakal Realty Services, Robert Knakal, said. “These assets are no longer trading on economics, as buyers look at price per square foot to determine what they will pay. Thus, we are seeing miniscule cap rates, and some gross rent multiples are over 20 times rental income,” he said.

With the census projecting 1 million new residents moving into New York during the next 10 years, he added, “These people will have to live somewhere, and this dynamic is pushing rents up.”

Ofer Yardeni, the managing partner and co-founder of Stonehenge Partners, a company that owns and manages more than 2,000 rental apartments in Manhattan, agrees.

“With vacancies hovering around 0%, demand for rental housing going through the roof, and rents being increased by over 25% in the last five months, owning a residential rental apartment building in Manhattan is a better investment than owning treasury bills,” he said.

With the decline in construction of new rental apartment buildings, the conversions of rental units into condos reducing the availability of rentals, and the costs to purchase in the condo market increasing, there has been a rise in demand for rental housing, the chairman of the national real estate practice at Greenberg Traurig, Robert Ivanhoe, said. However, the scarcity of and the high price for land in Manhattan, combined with high construction costs and higher interest rates, has made the production of rental units very expensive, such that the return on investment for developers and investors is not at palatable levels, he said.

“The luxury residential condo market has started to settle down from its feverish pitch of the past 3–4 years and new construction units are spending a longer time on the market before they sell as buyers seem to have more of a choice picking their best options,” the director at Eastern Consolidated Properties, Alan Miller, said by e-mail.”These factors have led to a tightening of the NYC rental market which some landlords tell me is the best they have ever seen.”

Rental apartment buildings, many earmarked for conversion to condominiums, continue to sell at a record pace. A number of buildings built in the early 1900s have recently been sold.

Last month, Ladera Partners purchased four five-story walk-up rental buildings with 81 units that were built in 1911 at 351–357 W. 45th St., between Eighth and Ninth avenues. It paid $11.5 million, or about $142,000 a unit, to the estate of Edith Bluttal.

Two apartment buildings built in 1905 at 66–70 W. 109th St., between Columbus and Manhattan avenues recently sold for $8.04 million, or $167,500 a unit. The Paz family purchased the buildings from Arthur Lees and family.

An Italian hotel company, Papmos Imobilre Sri, purchased a five-story, 14,965-square-foot office building built in 1900 at 214–216 E. 52nd St., between Second and Third avenues.The company paid $13.35 million, or about $892 a square foot, and plans to convert the building into high-end apartments.

Apartment houses all over the city are selling at record prices. A few months ago, Tahl-Propp Equities purchased two six-story apartment buildings at 1321 and 1330 Fifth Ave. at 111th Street for $28 million, or about $155,000 a unit.

The Continuum Health Partners next month is expected to sell the Elektra, a 32-story, 166-unit rental building in the heart of the Gramercy Park area on the west side of Third Avenue between 22nd and 23rd streets for close to $90 million. The building will be delivered vacant to the new owner.

Earlier this year, Brack Capital purchased a 26-story, 348,386-square-foot rental building with 325 units and a 130-space garage at 463 Second Ave.for $158 million, or about $486,154 a unit.

Massey Knakal Realty Services is marketing for sale three buildings with 69 units in the heart of the East Village, at 118 and 120–122 East 4th Street, for $13.9 million. It is also marketing a 47,000-square-foot loft building at 231 Bowery between Stanton and Rivington streets for $13 million, as well as a five-story site at 25 Park Place in TriBeCa for $10.5 million.

The limited supply of available rentals “makes the business of owning rent-stabilized properties a very secure and profitable business,” Mr. Yardeni said. “With rents for studios reaching $2,500 per month, one bedrooms renting for over $3,500 per month, rents in New York City are consistently breaking the $60 per square foot levels, something that we have never experienced before.”

A limited number of new rental buildings are scheduled for occupancy over the next 24 months. Those who want the opportunity to reside in a rental on the Lower East Side will be offered a new building directly adjacent to the famed Katz’s Delicatessen.

Edison Properties is building the residential and retail building at 188 Ludlow St. The development will include 242 apartments, 20% of which will be set aside for low-income residents and 5% of which will be earmarked for moderate-income tenants.

Later this fall, the rental office is scheduled to open at an AvalonBay Communities rental building at Avalon Bowery Place on the north side of Houston Street. In Long Island City, Avalon-Bay Communities is in the process of constructing a rental building at Avalon Riverview North.

This fall, the first tenants will be moving into Rockrose Development’s first rental building, the East Coast Tower I, a 31-story building with 650 units. It is the first of seven new residential buildings on what was a 22-acre Pepsi plant site in the Queens West Development.

A number of rental buildings are scheduled to open in Lower Manhattan. A 162-unit mixed-income residential rental building will be constructed adjacent to the site of Edward J. Minskoff’s development at 270 Greenwich St., across from Battery Park City.

Early next year, the first tenants will move into Leviev Boymelgreen’s 88 Leonard St., on the southeast corner of the intersection where Leonard meets Broadway. The 23-story tower with 334 apartments received $112.5 million in Liberty Bond financing. In accordance with Liberty Bond eligibility, 5% of the units will be reserved for affordable housing.

Boymelgreen is marketing for sale the leasehold interest in the 16-story, 172-unit Hudson Park Riverside rental building at 323 W. 96th St. Units rent for $42 to $55 a square foot, and the rents are stabilized with increases determined by the New York City Rent Guidelines Board. The stabilized rents expire in 2013. Industry leaders expect the leasehold to fetch $90 million, or $523,000 a unit.

Next year, Glenwood Management will open its 57-story, 396-unit rental apartment building at 10 Barclay St., at the intersection of Vesey Street.

Tenants are moving into the Lalezarian Brothers’s conversion of 100 Maiden Lane, the former headquarters of Caldwalder Wickersham & Taft, which was purchased for $57 million. The 25-story former office building, which received $98 million in Liberty Bonds, was converted into 340 rental units.The Lalezarian Brothers have recently opened the rental office in Casa, a 17-story, 155-unit building on West 21st Street in Chelsea.

The rental office is also open at the Verdesian, a rental apartment building at the northern end of Battery Park City.The 26-story building at 211 North End Ave. is a development of Albanese Organization and its joint venture partner, the Northwestern Mutual Life Insurance Company. A few years ago, the joint venture completed the Solaire in Battery Park City.

The Related Companies, co-developers with Apollo Real Estate Advisors of the Time Warner Center, are leasing rental apartments in the lower portion of a 43-story residential tower, One Carnegie Hill, at 25 E. 96th St.

Early next year, a joint venture of the Durst Organization and Sidney Fetner Associates will open a 58-story mixeduse complex, the Epic. The 80/20 rental will have 458 rental units beginning at the 14th floor. The property is located on West 31st Street between Sixth and Seventh avenues.

I concur with Mr. Yardeni when he says, “As New York City remains the home for most major corporations in the world as well as being the most sought place to live for young professionals, there will be continued demand for rental units for the years to come. The growing trend of ‘reverse migration,’ where suburbanites are moving back into the city, will also add fuel to the demand for rental units in the city.”

Mr. Stoler is a television broadcaster and senior vice president at a title insurance company. He can be reached at mstoler@newyorkrealestatetv.com.