Doormen Can't Stop Tenants from Moving

Doorman buildings are seeing tenants flee before skyrocketing rent prices.

By James R. Lindamood

In a press release from The Real Estate Group's July report, the organization suggests that landlords with more than one building under their control are in the process of raising rates yet again. The price for an apartment in a doorman building has steadily increased over the years, even though the number of units in those buildings is on the rise also.

According to the report, owners seen either unaware of the market situation, or that they're taking drastic measures to avoid lowering rent amounts. Landlords are offering incentives with one hand, to entice new renters to enter their buildings, then they're raising the base rent amount to cover the cost of the enticements. The trend, however, is bothersome. Even though landlords are trying drastic measures to get their apartments rented, many apartments go vacant regardless.

The trend varies by area, however, with rents in the Financial District increasing by between 2.5 and 4.5 percent, depending on the size of the apartment. While those rental amounts are on the rise, the amounts that renters pay in desirable areas such as SoHo and the East Village have actually decreased. It's important to note that the most significant different between these areas of town is that Financial District buildings typically have a doorman, or controlled entry.

It seems clear that the majority of landlords in the highest-rent areas are a bit out of touch with the current market conditions. This may be because most of the luxury real estate market has avoided a major hit in recent months, with the housing crisis in full swing. However, if luxury buildings continue to bleed tenants, we may see a new price war emerge from the management companies.