There is a segment of the super-rich in Manhattan who can easily afford to purchase luxury property but, for a number of reasons, choose to rent instead.
In a deep dive into this elite crowd, the Financial Times I spoke to several real estate brokers who revealed that rent can range from $25,000 to $75,000 per month, although a townhouse in SoHo was rented to a tech bro for $100,000 per month, or $1.2 million per year.
The supply of such properties exploded after Michael Bloomberg rezoned areas to allow taller buildings while he was mayor of New York. But the preference for renting over owning has been attributed to a more recent trend, according to the FT report.
The exodus of New York residents to Florida since the pandemic has been a key catalyst. Even though they spend most of their time working remotely in the tax-free Sunshine State, they still need a place to sleep in Manhattan when traveling for important meetings or events .
An extended stay in a five-star hotel would cost more than renting a luxury apartment. Additionally, the brokers told the FT that renting suggests less permanence than ownership, and that remote workers are eager to avoid scrutiny from New York tax authorities. Many leases are also placed in corporate accounts, meaning lavish rents are tax deductible, while businesses are also reluctant to own an expensive asset. One broker even suggested that renting a place on Billionaires’ Row was a good networking opportunity.
Most very wealthy tenants behave well, according to brokers. But some are not, and they have the financial means to try to avoid any consequences. Here are some horror stories.
“They are very rich and it is very difficult to pin them down, because they also have the assets to fight,” said Collin Bond, who leads the Fabrikant Bond team at Compasssay it FT.
He gave the example of a tenant working in the financial sector who was paying $30,000 a month and who was evicted. The landlords later discovered that he had refused to pay his rent in other cities and avoided the courts, but he was taken to court in New York and had to pay.
But the headache doesn’t stop there.
“We went to assess the damage and found out that he had literally taken out the walls. Apparently he had contractors come in and told them to rip everything up, put it all in bags and run it,” said Jump.
Meanwhile, Julie Pham, an agent for Corcoran, told the FT that a businesswoman paying $50,000 a month asked the landlord to install high-tech Toto toilets. But when she moved out, the landlord discovered she had stolen them.
Then there were these two crypto brothers.
Brandon Trentham, a Compass agent, recounted an episode to FT of “Bitcoiners” paying $55,000 a month for a furnished townhouse, where the owners had placed their personal items in locked closets as stipulated in the lease.
But the tenants opened them anyway, took the items out and threw them on the sidewalk to be collected as trash. The owners recovered some items, but others were resold. Facebook Walk.
“They were crying because of all the memories of their children and their family photos,” Trentham recalled. “And when we spoke to the tenants, they had no remorse. They were young punks with stupid money. And they said, “We’ve asked for all personal items to be removed, and if you want to sue us, go ahead.” »
