September 28, 2018
As rents continue to rise in the most desirable markets around the country, the needs and wants of prospective high-end renters are shifting almost as quickly.
“What’s popular now are projects that offer walkability; live, work, and play in one central location,” says Karen Elmir, CEO of the Elmir Group in Miami.
In hot markets across the country like New York City, Bellevue, Hawaii, and South Florida, renters are shifting back towards urban-style living driven by convenience. They’re willing to pay higher rents, but they expect commensurate amenities to support the lifestyle.
“We’re here to add value to the residents’ lives on a daily basis,” says Jana Koerberle, senior vice president of leasing at Kemper Development Company, who developed and now operates Two Lincoln Tower in downtown Bellevue.
The year-old building includes high-level concierges for just about any need, access to two gyms (plus a SoulCycle in the lobby), parking, and a prime location right in the middle of Bellevue Square. Rents are higher to reflect that (starting at $4,150 per month for a one-bedroom, well above the $2,824 average), but the all-inclusive package is now something that’s more the norm than the exception.
In Manhattan, where the average luxury building rent is approaching $4,500 per month, Citi Habitats’ president Gary Malin says that the new standard of luxury in rentals is closing the gap for many.
“Before, rentals didn’t give the luxury client what they were looking for, but now most buildings are hiring high-end architects and adding those high-end amenities,” he adds.
Malin notes that because of all of the added costs when purchasing a home, especially in New York City, if a buyer doesn’t plan on living in the residence at least five years, that person may not want to get “caught in the market.” Rentals offer pure flexibility and no long-term commitment, which makes renting an attractive proposition in the city’s wildly fluctuating housing market.
An incredible amount of new construction is coming online in South Florida, where numbers aren’t fluctuating quite as much as in the Big Apple, but the demand of the market reflects a broader range of renters both domestic and international.
Large inventory is stagnating the current market, especially with 5,062 units under construction in downtown Miami alone.
Panorama Tower developer Jerry Hollo isn’t too concerned, as he says that his 821-unit building is bringing a distinctive level of luxury and, you guessed it, unparalleled amenities, to the city’s hot Brickell neighborhood.
“In essence, we’re a service company,” he says. “[Among other things] we’ll have someone on-site 24/7, a pet spa, and a ‘cyber café.’ These are things that people can enjoy together and it creates a strong sense of community.”
As much as the centrality and car-free lifestyle of a neighborhood like Brickell matters to young professionals, serenity and privacy reigns supreme in Hawaii, where exclusivity with a gated home or private penthouse elevator top the want lists of prospective renters.
“Fully furnished units are also in high demand,” says Elite Properties director of property management Charlotte Sherwood.
Obvious features are still in play as well, including oceanfront/ocean views, heated pools, first-class appliances, and high-tech amenities such as security systems.
There are primarily two groups of renters that come to the Aloha State: One is looking to maintain a secondary residence—one they’ll use for a few weeks each year. The other is looking to try out Hawaii for a year or so and see if it makes sense to make a move long-term.
Sherwood noted that they also draw renters from Japan, China, Canada, and Australia—each with a specific set of needs. Something like 1551 Ala Wai Blvd. #3005 in Honolulu is an example of a full-service penthouse that attracts renters. The array of on-site amenities, first-class finishes, and sweeping views makes the $8,000 per month price tag much more palatable compared to what the same list of features would cost in a condo.
If there’s one thing that’s clear across many of the country’s luxury rental markets, it’s that renters are now more discerning than ever. Whether they’re moving across states for a job, or across oceans for a vacation, the sheer level of product out there allows renters to finely hone what they’re looking for and understand that they can get more value as opposed to buying.
“Especially with the demographic looking to downsize,” Koerberle says, “it can potentially free up millions in capital to spend elsewhere.”