No Block Left Behind: As Rental Market Heats Up, Attention Turns to Previously Overlooked Areas

LCOR_25Broad- Aline Living RoomAware of the need for rental housing, developers are busily erecting buildings in neighborhoods that have previously been considered less than desirable. Glenwood Management Inc., one of the largest owner/developers of luxury rental buildings in the city, is in the process of renting out apartments in its newest building, Crystal Green, at 330 West 39th Street, between Eighth and Ninth Avenues. And business is brisk for the high-end luxury building boasting 200 studios, one- and two-bedrooms, a stunning lobby and beautiful amenities including a children’s playroom and fitness center.

One of the building’s advantages, as Gary Jacob, Glenwood’s executive vice president, points out, is its proximity and access to transportation, which more westerly developments—specifically those in the area that has come to be known as the Hudson Yards (far west Midtown)—do not yet enjoy. “The renting is brisk,” says Mr. Jacob. “We’re very happy with the lease up velocity. The area is very well-received by young renters.”

Crystal Green follows on the heels of another Glenwood building erected nearby, Emerald Green, with 569 units. According to Mr. Jacob, rental buildings typically have a 25 percent turnover rate. In a good market, which he foresees, “we can raise rents by 5 percent with turnover.” A couple of years ago, he adds, they could go even higher, but 2008 marked the beginning of a lull. When Emerald Green opened in 2009, the market was not as strong.

“Things have picked up,” says Mr. Jacob. With Manhattan’s scarcity of land and financing, there are no downward pressures on rents, he adds. “The only downward force would be an economic hit like the one in 2008. Barring that, we are optimistic.”

The Gotham Organization, one of the city’s largest residential and mixed-use developers, is also betting on the Hudson Yards area, opening a new 550-unit building this summer called Gotham West at 46th Street and 11th Avenue. Melissa Pianko, the firm’s executive vice president for development, says website traffic at its rebranded website, Livinggotham.com, has been heavy all winter, and with warmer weather, she expects plenty of real traffic among apartment seekers. “There has been a lot of press about a slowdown,” Ms. Pianko says, “but I think it is more seasonal. Things always pick up in the spring.”

Down in the Financial District—or FiDi, as realtors are calling it—LCOR, the owners of the landmarked and storied building 25 Broad, are similarly optimistic. LCOR took over the building in 2011, after a conversion to condominiums hit the snag of the economic downturn. Now, renters at 25 Broad can enjoy condo-level upgrades, which, says Kirsten Risko, marketing director at LCOR, “is unusual for a rental building,” especially one built in 1901. The building at 25 Broad has all one- and two-bedroom units, dark hardwood flooring and a washer/dryer in every unit. “We’ve been opening in phases,” says Ms. Risko. “The building is 85 percent occupied currently.”

The building at 25 Broad also has the good fortune of having escaped Hurricane Sandy’s wrath, unlike some of its FiDi neighbors. “FiDi,” Ms. Risko insists, “is having a strong spring.”