October 3, 2019
Rent sale operations have traditionally been among the poorest in American capitalism, there with payday loans that offer desperate people quick cash at a low APR, low around 400 percent.
But the modest lease-to-buy movement has now entered an unlikely venue: New York City’s upscale condominium market. Extell Development launched a “rent-to-buy” program to drive sales lagging behind in its 800-foot-tall luxury condo tower A square of Manhattan, the Real deal reports. Tenants will be able to apply a full year’s rent to the purchase price if they decide to purchase one of the 815 tower apartments near the Manhattan Bridge, derisively dubbed “the cheese grater” for her nubby glass skin. Extell had previously offered buyers up to 10 years of free common charges.
“We anticipate that after living in One Manhattan Square, many will take advantage of this program and buy into the building,” said a spokesperson for Extell.
But the developer advantage is also clearly the latest sign of the downturn in the Manhattan condominium market, where sales rose in the second quarter after a slump. six quarters drop. This one-time sales failure was caused by a rush to beat the new tax levies that went into effect on July 1.
At One Manhattan Square, rents range from $ 4000 one month for a T2 up to $ 10,000 for a three bedroom. The average selling price of closed units is $ 1.7 million. Property records show that Extell sold 194 units for a total of $ 332.4 million to the tower, which kicked off sales in 2016. The tower, which is flanked by Chinatown, a group of housing projects, the FDR Drive and the East River, was initially marketed to wealthy Asian buyers. But foreign investment has dried up and buyers are reluctant to buy luxury real estate on the Lower East Side.
“The model of ‘If you build it, they will come’ is finished,” says Jordan sachs brokerage Bold New York. “People are no longer believers now. There is a lot of talk about a coming recession.