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May 2009

Market Report: No May Flowers for Manhattan Rentals


Rental-heavy brokerage The Real Estate Group New York has released the May edition of its Manhattan Rental Market Report (available to download here), and while rents stayed largely flat over last month, the year-to-year declines can be seen in the tables above. TREGNY also cites increased demand over the past month as a sign that the typically hot Manhattan spring/summer rental season will have life this year. Graduates should check out non-doorman buildings on the Upper East Side, where rents are at a 13-month low.

While the report doesn't factor in landlord incentives that drive rents down even lower, the May '07 to May '09 head-to-head neighborhood comparisons that TREGNY includes will still open some eyes to the state of the rental market. Neighborhoods such as Murray Hill, Midtown East and the East Village have seen some approx. 20% drops in certain categories over the past two years. Getting back to the here and now, below is a neighborhood snapshot of May rents (click on the graphics to make 'em bigger):

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Former Corcoran sales director suing for commissions from Five Franklin, the Avery and Linden78

A former sales director for Corcoran Sunshine Marketing Group says she has been stiffed for more than a quarter million dollars in residential brokerage commissions for sales in high-profile developments including Five Franklin, the Avery and Linden78, a court filing says.

Broker Nancy Reese accuses Corcoran Sunshine and other Corcoran entities of withholding at least $200,000 in commissions on closed sales and says the developer of Linden78 owes her $70,000 in commissions on canceled contracts, the court papers say.  

The lawsuit was filed at a time when experts believe more contracts will be canceled as the condominium market continues to deteriorate. But real estate lawyers said most contracts between brokerages and developers include clauses that state that commissions are not due until the title is passed to the buyer, so brokers are generally not paid when a contract is canceled, attorney Adam Leitman Bailey, who was not involved in the case, said.  

Reese, who left Corcoran Sunshine Marketing Group at the end of April after working at the firm for about four years, accused the company of not paying her a total of $200,000 at Five Franklin Place, the Avery at 100 Riverside Boulevard, the Orion at 350 West 42nd Street and three other locations after the sales closed.

Reese also alleges in her lawsuit brought in New York State Supreme Court May 18 that the sponsor of the struggling development Linden78, at 230 West 78th Street, owes her $70,000 in commission fees even though the sponsor offered rescission rights to all buyers in mid-April.

The developer of the project is Urban Residential, but the lawsuit does not name that company, but instead the entities listed on the condo offering plan, including Amsterdam 78 and Metropolitan Housing Partners, with the state Attorney General's office, Reese's attorney, Debra Guzov, said.

Urban Residential did not immediately respond to a request for comment. Corcoran Sunshine declined to comment.   

With the declining economy, the number of rescinded contracts has increased, impacting projects such as Linden78 and the Jasper at 114 East 32nd Street. But experts said they do not expect to see a flood of brokers suing their firms as Reese did.

Guzov, a partner with the law firm Guzov Ofsink, said that Reese was owed the commission after she presented ready, willing and able buyers, despite a rescinded contract.

"As we set forth in the complaint the commission has been earned and it comports with the language in the contract for earning the commissions," she said.

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Gramercy Park Irving Place One Bedroom Below Market Value

East 17th Street & Irving Place One Bedroom

1 Block from Union Square!

Gramercy / Union Square / Irving Place


Well maintained, walk-up building
Third floor unit
Kitchen including appliances and new cabinetry
Marble bathroom, new fixtures
Living room featuring an exposed brick wall
11' X 11' bedroom, can fit a queen size bed and extra furniture
Two storage closets
Northern exposure view, over looking East 17th Street
New hardwood floors
Rent stabilized unit, priced below market value
Excellent Gramercy location; near all transportation, restaurants, Irving Place, the East Village, and Union Square



Name: Jeffrey
Phone: 610.781.8417

East 17th Street & Irving Place One Bedroom

1 Block from Union Square!

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Board proposes stabilized rent increases

The board that oversees rents for New York City’s one million rent-stabilized apartments proposed a range of rent increases on Tuesday, disappointing tenants and their supporters, who say the recession warrants a rent freeze.

In a preliminary vote, the city’s Rent Guidelines Board proposed increases of 2 percent to 4.5 percent for one-year leases and 4 percent to 7.5 percent for two-year leases. Last year, the board approved its highest set of rent increases since 1989 — 4.5 percent on one-year leases and 8.5 percent on two-year leases. The board will hold two public hearings, on June 15 and June 17; it is to take a final vote at a meeting June 23.

Landlords have argued that the board’s rent increases in recent years have been outpaced by the rising operating costs of rent-stabilized units. Tenants and some elected officials, meanwhile, have called on the nine-member board to freeze rents for rent-stabilized units, citing rising unemployment, falling median household incomes and growing numbers of tenants in housing court facing eviction for nonpayment of rent.

“This would be an appropriate year to do that,” Wasim Lone, a tenant organizer with the nonprofit group Good Old Lower East Side, said of the rent freeze. “This is the worst recession we’ve seen since the Great Depression of the 1930s.”

A report released last month by the board’s staff found that operating costs for rent-stabilized buildings increased 4 percent from April 2008 to last month; the increase was 7.8 percent in the corresponding period in 2007-8. The report also found that the 4 percent increase was offset by decreases in fuel oil and insurance costs.

The City Council speaker, Christine C. Quinn, said in an interview that she would urge the board to impose a rent freeze, in part because of the impact of the recession on tenants as well as the report showing that operating costs had not risen significantly. “We can create some relief for tenants without creating an unfair burden for landlords,” Ms. Quinn said. “We believe even with a rent freeze, landlords would continue to make a profit. They would just make a smaller profit.”

Since the board was established in 1969, it has never approved a rent decrease or a rent freeze.

Joseph Strasburg, president of the Rent Stabilization Association, which represents thousands of owners of rent-stabilized apartments, said he was disappointed by the preliminary range of increases approved on Tuesday, adding that small property owners had been hard-hit by the economy and had struggled to pay property taxes, water and sewer bills and fuel costs. He said the group was opposed to any rent freeze.

“Ten percent of my membership may not survive by this time next year,” Mr. Strasburg said, referring to small property owners. “We discovered in early fall that they were still paying off their winter fuel bills.”

The final vote last year was a rowdy affair, marked by shouting matches between landlords and tenants, many of whom had sneaked in plastic whistles and blew them at ear-ringing volume during the proceedings. In contrast, the meeting on Tuesday at the Great Hall at Cooper Union in the East Village was sparsely attended. The audience numbered about 100, most of them tenants or tenant organizers.

The meeting gave rise to divergent views on who was suffering the most during tight economic times — tenants or landlords. Steven J. Schleider, a member of the Rent Guidelines Board who represents owners, said that 1 in 10 properties was distressed because rents did not cover expenses. Adriene L. Holder, a board member representing tenants, said the severity of the recession, including rising unemployment, called for the board to adopt no rent increase.

“People cannot shoulder these types of increases being proposed,” Ms. Holder said.

Last year, the board approved a controversial supplemental rent increase for tenants who had lived in their units for six years or more, and a range of similar increases were approved on Tuesday. Owners of buildings with those tenants have the option of charging them the approved increases, or a $20 to $45 monthly increase for one-year leases or $40 to $75 for two-year leases, whichever is greater.

Two legal aid groups, the Legal Aid Society and Legal Services NYC, sued the board over the supplemental increase last year; the case is pending.

On Tuesday, to the howls of the tenants in the audience, the board voted 6-to-3 to approve the range of proposed increases and the range of supplemental increases.

Much of the discussion between board members leading up to the vote centered on last year’s deliberations. Tenants and their supporters last year said that the supplemental increase should not have been voted on, because it was not part of the tentative range of increases the board had previously approved. The board’s chairman, Marvin Markus, said at the time that the board had authorized supplemental increases in previous years and that the board’s actions were within the law.

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Renters move back to Manhattan

Great Recession prices are drawing even the most loyal outer-borough dwellers back to Manhattan. The migrants hail from Hoboken, Astoria and the brownstone blocks off Prospect Park, as New Yorkers who found themselves priced out of the gilded isle in the boom years are bidding farewell to long commutes and skinny-jean chic.

Among the lures: $1,600 one-bedrooms on the Lower East Side. Lenient landlords who no longer require security deposits. And an overriding sense that an obscenely overpriced borough is now, well, slightly more reasonably overpriced.

“There’s a part of me that feels like I’m cheating on Brooklyn,” said Keith O’Brien, a 30-year-old in marketing and public relations who recently jumped from a spacious two-bedroom in Greenpoint, Brooklyn, to a Lower East Side walk-up. “But this was a unique moment in real estate history where renters have the upper hand, which seemed unbelievable a couple of years ago. I realized that it would have been foolish not to start looking at places.”

For an extra $100 a month, Mr. O’Brien — a seven-year Brooklyn stalwart — is now enjoying a trendy location and a six-minute commute, in exchange for losing half of his living space. “There’s no sink in the bathroom,” he said, “but concessions must be made.”

Newly minted Manhattanites range from 30-somethings seeking a professional edge through a shorter commute, to out-of-work recent graduates who think they can get a better deal on the Upper East Side than in the usual post-college enclaves of Williamsburg and Fort Greene.

Numbers on the New York rental market are notoriously unreliable, but recent reports suggest that rents are falling faster in Manhattan than in neighboring boroughs.

In the first three months of the year, one-bedroom rents in Manhattan fell 6.7 percent compared with the previous year, while Brooklyn one-bedrooms dropped just 3.2 percent, according to data from Citi Habitats and Ideal Properties Group, both brokerage firms. Other reports show some Manhattan rents down by 10 percent from a year ago.

“I just got lucky with the whole financial meltdown,” said Kristi Giamichael, 26, who earlier this year gleefully tracked falling rental prices on Craigslist from the Hoboken duplex that she shared with two friends. She liked her neighborhood bar scene and the $1,172 rent, but realized Manhattan was no longer prohibitively expensive.

On May 1, Ms. Giamichael and a roommate moved into an 800-square-foot one-bedroom in Ruxton Towers, a landmark prewar building on 72nd Street off Central Park West. The two will split the $2,600 rent, and the landlord paid the fee to their broker, Caroline Bass of Citi Habitats.

Like many young adults, Ms. Giamichael moved to New York at a time of brutally high rents in Manhattan. Those seeking perks like in-house gyms and roof decks flocked to Hoboken and Long Island City, where amenities could be had for the price of a Yorkville walk-up.

Now, prices at upscale rental buildings like 45 Wall Street have come down significantly, discounted by 15 to 20 percent in recent weeks. At 20 Exchange Place, a tricked-out conversion around the corner from the Stock Exchange, the management company will waive the security deposit if the prospective tenant’s credit checks out. Stuyvesant Town offers the same perk on some apartments, along with waiving the broker’s fee.

“We do see that certain neighborhoods in Manhattan may be a better deal than certain neighborhoods in the boroughs,” said Stephen Love, a broker at Ardor Realty.

So some New Yorkers who came to appreciate the outer boroughs — spacious apartments, neighborhood charm — are finding reasons to return.

Matthew Creamer spent nearly a decade in Brooklyn (with a brief stopover in Hoboken), rotating through Smith Street, Cobble Hill and finally Sunset Park, where he spent four happy years in a 1,000-square-foot one-bedroom for $1,400 a month.

“I told a lot of friends that I would never move back from Brooklyn, had no desire to move back to Manhattan,” he recalled. “I said that on a lot of occasions.”

But in March, Mr. Creamer, 32, began to feel anxious about his 45-minute commute to Midtown, where he works as an editor at Advertising Age. “So much has changed in the past six months,” he said. “In the past, people wanted a separation from work on the weekend. I liked the fact that the neighborhood I lived in couldn’t be any more different from the place that I worked.”

Andrew Baisley is Bushwick’s loss and Chelsea’s gain.

Now, Mr. Creamer said, “people are so worried about their jobs and the general economic situation, that people don’t mind being near work. It may even make them feel a little bit safer.”

The possibility of subway cutbacks made him worry about making morning meetings on time. “At a 45-minute commute, it’s not the worst thing in the world,” he said. “But if something goes wrong, it gets ugly really quickly.”

Mr. Creamer began searching for a place near Grand Central Terminal, aware that he would have to sacrifice space (and price) for peace of mind. Last month, he moved into a studio in a building with a doorman at 33rd Street and Park Avenue with views of the Empire State Building. Although he pays more in rent than he did, he calculates that he nearly breaks even, now that he’s free of his monthly MetroCard and hefty late-night cab fares. And he received one month free on a 13-month lease.

The place is a third the size of his last apartment, and he does not have the basement storage he enjoyed in Sunset Park. At times, he misses the neighborhood feel of his old haunt.

“Nothing has changed as far as the way I feel about Brooklyn as far as it being one of the best places on earth to live,” he said. “I doubt I’ll come out of my experience in Midtown thinking that. I’ll probably like it, but I can’t imagine having the same feeling for it.”

Brooklyn on the whole is still more affordable than Manhattan: one-bedrooms east of the river cost an average of $1,901 in the first quarter, compared with $2,432 in Manhattan, according to market reports.

But the flow of Manhattanites into Kings County has apparently slowed. In the first three months of 2008, nearly a quarter of renters moving to Brooklyn hailed from Manhattan. A year later, only 9 percent of renters came from across the river, according to data from Ideal.

And some of Brooklyn’s trademark tenants — underemployed recent graduates — are also changing their minds.

For two years, Mark Schenkel, 25, has lived with roommates in a ground-floor apartment in a Windsor Terrace brownstone. Mr. Schenkel is paying $1,175 a month for a building with no laundry. His commute to work in the West Village was a half-hour haul on the F train.

“I always assumed that Manhattan was way too expensive for me and out of my reach,” said Mr. Schenkel, who moved to the city in 2006. But when his landlord threatened a $100 rent increase, he decided to shop around.

“Just for fun, I started looking at the Upper West, Upper East,” he said. “Everybody talks about how nice and ritzy it is. I was shocked to see some of the prices.”

In Yorkville, for instance, he found rents that were several hundred dollars cheaper than what he and his roommates are paying in Brooklyn.

“They’re a little bit smaller, but they have some of the amenities that I don’t have now,” he said, citing perks like a laundry and an elevator. Most of the apartments he has toured are renting for under $1,000 a person.

“A lot of these places are just desperate to find people,” Mr. Schenkel said. “People are responding to my e-mails within minutes to look at the apartment. People are saying, ‘Come whenever you want.’ ”

Craigslist directed him to a three-bedroom in a small building off First Avenue on 88th Street; the monthly rent came out to $730 a person, with no broker’s fee.

Alas, that particular apartment was “big, but had no kitchen or place to sit,” Mr. Schenkel later wrote on Twitter. “It’s like the builders forgot to include that.”

The recession has not been kind to Mr. Schenkel, who recently lost his job with a record label. But unemployment has only underscored his interest in moving across the river. The Upper East Side is home to big retail franchises like Barnes & Noble and Best Buy that may still be hiring.

In Brooklyn, he said, “all the local stores have two or three people working for them at a time. Mom-and-pop shops don’t need people in this economy.

“I never thought losing my job would be one of the reasons I end up moving to Manhattan,” Mr. Schenkel said, sounding a tad dazed. “It seems backward to me, what’s going on.”

Renters aren’t the only ones looking to move. When Paul Kolbusz, a broker at the Corcoran Group, decided to buy in 2007, he opted for a new development in Long Island City. He was willing to give up Manhattan conveniences for the extra living space.

That was before the bubble burst. Earlier this year, with construction still incomplete, the developer was obligated to offer Mr. Kolbusz the right to rescind his contract. He jumped.

“They were trying to negotiate with me in order to keep me,” Mr. Kolbusz said. “I decided against it because Manhattan opened up in ways that it hadn’t before, and I didn’t want to miss the opportunity.”

Now he is shopping in prewar buildings in Murray Hill, and mulling over a $500,000 one-bedroom with beamed ceilings on East 28th Street. The unit is just $30,000 more than the Long Island City condo he left behind, but has two-thirds of the living space.

Even as rental prices fall, a little bit of luck can’t hurt in finding that dream apartment. Perry Balin, 28, spent a year in a $900 studio in Boerum Hill. Children ran screaming in the hallways and the heat cut out in the middle of winter.

“I’d always wanted to live in the city my entire life,” she said, “and Brooklyn was my second choice. I took it because it was what I could have at the time.”

Encouraged by chatter about cheap apartments, she set off with her broker, Jeff Brenner of Citi Habitats, to a fourth-floor walk-up studio on West 95th Street just off Central Park.

“It faces the back of the building, all of the really rich people’s yards on 94th Street,” Ms. Balin said. “I look out the window and feel like a millionaire.”

Her terrier, Tess, is more social and enjoys walks in the park.

The rent: $1,225 a month. Ms. Balin, an aspiring singer, hummed when she disclosed the figure. “Now, don’t be jealous,” she said with a laugh.

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Midtown East Studio Rental - East 49th - Walk to Work

Midtown East Studio Available - East 49th Street & 2nd Avenue

For showing times, please contact JAD Realty Group:


Midtown East / East 49th Street

Well maintained, walk-up building
Second floor unit
Separate kitchen including appliances and new cabinetry
Tiled bathroom, new fixtures
Large living space featuring a wall of windows
12' high ceilings
Eastern exposure view, bright
Four storage closets
New hardwood floors
Original crown moldings and detail
Live-in super
Priced below market value
Excellent Midtown east location; near all transportation, restaurants, Murray Hill, Grand Central Station, the Upper East Side, and Central Park



Name: Jeffrey
Phone: 610.781.8417

Midtown East Studio Available - East 49th Street & 2nd Avenue

For showing times, please contact JAD Realty Group:


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