Building Stories: La Vie Boheme! Are Rentals the New Condos?

Rather than our usual practice of telling the story of one building, this time we’re taking a look at a few buildings in the city—all rentals, because that’s where this market’s at!

THE OCTAGON: Roosevelt Island sells itself on being part of New York City and yet separate, quarantined from the hurly-burly of Manhattan while still only a subway stop away. Now, it looks like the narrow strip of water has protected some rental real estate from being infected by the market malaise. 

The Octagon opened in 2006 to some fanfare, being a restoration of an 1830s insane asylum, long since closed. With an outdoor swimming pool and family-friendly amenities like a full-time day-care center, the 500-unit luxury building leased up in a jiffy and has been nearly full since.

“For whatever reason, a lot of things are working for us,” said Bruce Becker, president of architect-developer Becker and Becker. Could have to do with the building’s trendy LEED Silver rating. Or the lower-than-Manhattan-proper rents. Or the fact that only 12 percent of residents work in finance—instead of Wall Street types, the Octagon is packed with people in marketing, design and tech-related jobs.

Sure, there’s a little softness in the one-bedrooms, which go for between $1,900 and $2,600. They’re offering a couple months of free rent to entice new tenants, and just put up a banner on the north parapet that’s visible from the F.D.R. Drive. Rents in general have leveled off, after rising a typical 8 to 10 percent a year from the first two seasons.  Then there are the 240 new high-end apartments coming online this month at Riverwalk Crossing, the fifth project in Related’s Riverwalk complex, which already has two large condo buildings. Riverwalk is closer to the island’s one metro stop, and boasts most of the same amenities as its more historic rental cousin to the north.

Still, the Octagon team is not worried, maintaining that Riverwalk will just bring more interested parties through their own leasing office. And at this point, potential renters are plentiful, looking for deals but leery of buying in a tumultuous market; the Octagon’s pension fund owner had thought about converting the building to condos, but is not moving forward with that plan at this point.

“In this economy, with uncertainty about home values, the renters are doing better than the homeowners,” Mr. Becker said. “We’re fortunate.”


COLUMBUS VILLAGE: You’ve probably heard more about the five new residential towers rising at 97th and Columbus from the people angry about them than the people trying to help them succeed. Many residents of Park West Village, the rent-stabilized housing towers next door also owned by the Chetrit Group and Stellar Management, have been vocal in their opposition to the massive market-rate rental project.

And for a little while, at least, it’s likely to stay that way.

Through a spokesperson, management declined to comment for this story, other than to say that a press release with pricing and availability details would be available in two weeks. They’ve also been keeping mum to the larger agent community as well—even though there seems to be interest in the development’s promised 710 units.

“We just don’t know anything that’s gong on with that building. There’s just zero information,” said Sequoia Millen-El, CityRealty’s director of client relations, noting that she gets a few inquiries a week from people interested in the project. “It seems like it’s on hold.”

Though it may still be under construction several months after its scheduled completion date, the complex is by no means on hold. Project manager Peter Rosenberg told the Columbia Daily Spectator that the buildings should be ready for move-in by Memorial Day, with apartments renting at prices comparable to the rest of the Upper West Side—which, according to the Real Estate Group’s April market report, are about average for Manhattan.

Other than Extell’s glassy Ariel condos on Broadway at 99th and 100th, the 30-story 808 Columbus and its smaller neighbors are still a somewhat new thing for the upper Upper West Side. Designed by Costas Kondylis, a firm with dozens of huge projects in the city—including the Atelier on 42nd Street, the Plaza Hotel, and five Trump buildings—they’re a stark contrast to Park West Village’s red-brick slab towers, one of Robert Moses’ biggest urban renewal projects.

Besides the anchor tenant of Whole Foods, there’s still quite a bit of big-box retail space up for grabs, with T.J. Maxx, Bank of America and Associated Supermarket as rumored takers.

DWELL95: The lobby of Dwell on Wall, the ritziest new rental in the Financial District, are literally paved with money—enlarged coins are inlaid in the floor. The whole thing was designed on a Wall Street theme, actually, with svelte surfaces, gold plating, and a few bulls and bears scattered around for effect. It’s trademark YOO by Phillippe Starck, the French New Design icon who does everything from trains to toothbrushes, and who tends to make himself as much a part of the marketing as the product itself.

But despite the over-the-top luxury, this was an eminently practical effort. “I’ve been predicting the cooling off of the housing market for four or five years now,” YOO chairman John Hitchcox told The Real Deal when the building started renting last spring. “It’s gone on much longer than we expected. And when condominiums start to slow, rentals get a little bit more busy.”

Good call. While condos have been going on the auction block left and right, Dwell on Wall’s 507 apartments were 76 percent leased in January and are 95 percent sold out, not including a batch of new units on the penthouse floor to be furnished by Starck himself. One-bedrooms are gone, but studios start at $3,475 and two-bedrooms at $6,280—well over the average for the area, which is already among the most expensive in Manhattan.

Developer the Moinian Group declined to release any information on current incentives, although The New York Times reported last summer that paid-up broker’s fees and two months free rent were in the offing. Since then, the lower-priced units have been snapped up.

Chalk it up to expert branding? Even the building’s telephone hold music oozes style—“Eets the besta place,” murmurs a male French accent, over soft funk beats. “Hermes and Tiffany, all these shop…”

Building Stories: La Vie Boheme! Are Rentals the New Condos?