Luxury Rentals Take The Stage
New York Times, August 2013
By Julie Satow
Increasing numbers of developers are pursuing luxury rental buildings like JDS Development’s new towers under way at 616 First Avenue. The concept is especially popular in up-and-coming neighborhoods, where it is often easier to attract rental tenants than condo buyers.
Developers have been encouraged to pursue the trend by the success of buildings like the Related Company’s MiMA on the Far West Side and Forest City Ratner’s 8 Spruce Street in the financial district.
Now joining the party is the institutional investor Invesco, which is rolling out a luxury rental brand in New York. Known as Instrata, it will be applied to several of the company’s rental products here, including Mercedes House on the Far West Side. That building, on West 54th Street, was originally built as a rental with condominiums on the upper floors. Invesco bought the condominium portion earlier this year, and will rebrand those top 11 floors, or 162 units, as rental units and name them Strata at Mercedes House.
“Instrata is going to be our strictly luxury assets in New York,” said Michael Kirby, a managing director at Invesco Real Estate. To be included in the brand, buildings must have condominium-level finishes and offer plenty of amenities. The landlord will offer free concierge service to all tenants of Instrata buildings, he added.
Other properties being similarly repurposed include the former Madison Belvedere on East 29th Street, to be known as Instrata NoMad; the Elektra on Third Avenue, now called Instrata Gramercy; and 75 Clinton Street, to be renamed Instrata Brooklyn Heights. Some of the buildings were conceived as condos; those built as rentals will be retrofitted with higher-end finishes or additional amenities.
“Over the past several years,” said Rob Neiffer, a director at Invesco Real Estate, “there has been an influx in the number of high-end rentals. Before that, anyone who wanted to rent in a luxury building had to go to a condominium, so we identified this void in the market and are hoping to fill it.”