First-Time Renters Are Leaving Uptown In Droves
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Move over, Normandie Court. The new go-to building for recent college graduates is in the financial district, at the three-year-old luxury rental tower at 2 Gold St.
The Upper East Side, once the location of choice for many newly minted New Yorkers, now has the highest vacancy rate for rentals of any area in Manhattan. While the neighborhood’s hipness has long since been eclipsed by downtown, until recently it managed to draw young people with its cheap rent and easily convertible apartments. But this summer, new luxury rentals in the financial district are offering generous incentives, such as no broker fees, free rent, and complimentary moving costs, drawing waves of recent college graduates and others new to the job market.
“It used to be that on the Upper East Side you could get the largest spaces for the best price,” a salesman at Domain Properties, Adam Dahan, said. “But now we’re seeing a lot of people coming towards the financial district. You can get the same space with all the amenities, and everything’s new.”
The median rent for an apartment on the Upper East Side is $3,600, compared to $3,495 in the financial district, according to the real estate Web site StreetEasy.com. Uptown also lacks many of the incentives renters can find downtown: Dwell at 95 Wall St., for example, will pay broker’s fees and give tenants two free months’ rent, while 20 Exchange Place pays broker’s fees, offers one free month of rent, requires no security deposit, and provides a pet spa appointment on move-in day.
According to Citi Habitats’ June rental market report, the Upper East Side showed the highest vacancy rate in Manhattan at 1.45%, compared to 1.31% for the financial district and 1.21% for Manhattan overall.
Buildings on the Upper East Side, such as One Sutton Place North, the Colorado, and Carnegie Park, have nearly twice the available inventory as in previous years, a broker at the Real Estate Group New York, Robert Beacham, said.
At Normandie Court, the vacancy rate is roughly the same as it was last year, but many residents are doctors and medical students from nearby Mount Sinai Medical Center, not the young finance types who once dominated the 1,477-unit complex, earning it the nickname “Dormandie Court,” the leasing agent, Patty Puma, said.
Meanwhile, the financial district has become especially popular with recent graduates. A 26-year-old resident of 17 John St., Catherine Oh, said she was attracted to the building because the landlord paid her broker’s fee and allowed her and her roommate to turn a studio with a home office into a two-bedroom. Moreover, the newly converted building came with a number of luxury amenities, including a roof deck and a doorman, features that similarly priced buildings she saw uptown lacked.
“Everything downtown was brand new,” she said. “It was a no-brainer for us. For the price, the standard of living is so much better.”
Another popular building for young people is Rockrose Development Corp.’s 51-story tower at 2 Gold St., where more than half of the tenants are first-time renters in New York, the director of sales at Rockrose, Kathleen Scott, said.
“I don’t remember a single person there over 37,” a tenant who moved out of 2 Gold St. two weeks ago, Steven Miller, said. “If you’re between 22 and 38, that’s pretty much 100% of the people there.”
The shift downtown is due in part to fewer young renters moving to Manhattan this year. “There aren’t as many new hires, and analyst programs are a lot smaller,” the CEO of the Real Estate Group, Andrew Barrocas, said. “I can tell you, there’s a lot of inventory on the market this summer compared to the past few summers.”
Of the young people who are moving to Manhattan, most prefer to be near Greenwich Village, TriBeCa, and SoHo. “When I first came to New York, all the investment bankers were on the Upper East Side,” Mr. Beacham said. “They all want to be downtown now.”
First-time renters who traditionally have crowded into relatively inexpensive apartments on the Upper East Side, a few blocks east of the subway, now have more options.
“There are better deals all over Manhattan this year,” a senior associate broker at Citi Habitats, Caroline Bass, said, adding that many landlords have offered to pay broker’s fees for her clients. “It’s a much better market for first-time renters.”