There is a section of the super-rich in Manhattan who can easily afford to buy a luxury property, but for various reasons choose to rent instead.
With a deep insight into this elite audience, the Financial Times I’ve spoken to several real estate agents who have found that rent can range from $25,000 to $75,000 per month, although a townhouse in SoHo can be had for $100,000 per month – or $1.2 million per year. was rented to a technology broker.
The supply of such properties skyrocketed after Michael Bloomberg rezoned areas to allow for more high-rises during his term as New York mayor. However, according to the FT report, the preference for rented accommodation over home ownership was attributed to recent trends.
A key trigger has been the migration of people from New York to Florida since the pandemic. While they work remotely most of the time in the tax-free Sunshine State, they still need a place to stay in Manhattan when they attend important meetings or events.
A longer stay in a five-star hotel would be more expensive than renting a luxury apartment. In addition, brokers told the Financial Times that renting suggests less permanence than owning, and remote workers are eager to avoid the scrutiny of New York tax officials. Many rental agreements are also taken out by companies, meaning the high rents are tax deductible, while companies are also reluctant to own an expensive asset. One agent even suggested that renting an apartment on Billionaires’ Row would be a good networking opportunity.
Most super-rich tenants are well-behaved, brokers said. However, for some this is not the case and they have the financial means to try to avoid any consequences. Here are some horror stories.
“They are very wealthy and it is very difficult to take them down because they also have the means to fight,” says Collin Bond, who leads Fabrikant Bond’s team compasssaid the FT.
He shared an example of a tenant working in finance who was paying $30,000 a month and was evicted because of it. The owners later discovered that he had refused to pay rent in other cities and dodged court, although he was taken to court in New York and had to pay.
But the headache wasn’t over yet.
“We went in to assess the damage and found that he had literally removed walls – apparently he had brought in contractors and told them to tear everything up, put it in bags and carry it out,” Bond said.
Meanwhile, Julie Pham, an agent at Corcoran, told the FT that a businesswoman paying $50,000 a month demanded the owner install high-tech Toto toilets. But when she moved out, the owner discovered she had stolen them.
Then there were these two crypto brothers.
Brandon Trentham, a Compass agent, told the FT about an episode in which “Bitcoiners” paid $55,000 a month for a furnished townhouse where the owners had placed personal belongings in locked cupboards, as stipulated in the rental agreement.
But the tenants opened it anyway, picked up the items and threw them on the curb to be picked up as trash. The owners were able to recover some items, but others were resold Facebook Marketplace.
“They cried for all the memories of their children and family photos,” Trentham remembers. “And when we spoke to the tenants, they had no remorse. They were young punk kids with stupid money. And they said, ‘We asked for all personal items to be taken out, and if you want to sue us, go ahead.'”