Adam Neumann and his wife set out in 2008 to buy an apartment in lower Manhattan, hoping to get a bargain on a 2,500-square-foot (232-square-meter) luxury unit.
Failing to find a deal, they chose an increasingly practical option for the city’s wealthiest residents: renting. They’re paying $300,000 upfront on a five-year lease for an empty TriBeCa loft with almost twice the space that the landlord will outfit to their design. The median monthly rent for all luxury units in Manhattan, defined as the top 10 percent of the market by price, declined 18 percent to $6,950 in the third quarter from a year earlier, according to New York-based Miller Samuel. The median luxury sale price rose 13 percent to $4.39 million, after bottoming out at $3.78 million in the final three months of 2009. The divergent moves left the gap between the cost of buying a luxury apartment and the annual cost of renting at its widest since the first quarter of 2009, when the median purchase price peaked at $6.6 million. Buying cost 53 times renting in the third quarter, compared with 38 times a year earlier and 58 times in March 2009. “People are much more hesitant to put down their money into such a large investment when there is such a strong possibility that the market could go down further,” Song said.
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