There is a group of wealthy individuals in Manhattan who have the means to purchase luxury properties but opt to rent instead for various reasons.
In a detailed exploration of this affluent community, the Financial Times interviewed several real estate agents who disclosed that rental prices can range from $25,000 to $75,000 per month. One particular townhouse in SoHo was rented to a tech entrepreneur for $100,000 a month, equivalent to $1.2 million annually.
The availability of such properties increased after Michael Bloomberg implemented rezoning measures to allow for more high-rise buildings during his tenure as New York’s mayor. However, the preference for renting over owning has been linked to more recent trends, as outlined in the FT report.
One significant factor was the migration of people from New York to Florida following the pandemic. While these individuals primarily work remotely in the tax-free Sunshine State, they still require a place to stay in Manhattan for important meetings or events.
Staying at a five-star hotel for an extended period would be more costly than renting a luxury apartment. Additionally, renting implies a sense of impermanence compared to ownership, and remote workers aim to avoid the attention of New York tax authorities. Many leases are also held under corporate accounts, making the extravagant rents tax-deductible, while companies are hesitant to own an expensive asset. Some agents even suggest that renting a property on Billionaires’ Row presents networking opportunities.
According to brokers, most affluent tenants are respectful. However, some may not be, and they possess the financial resources to evade consequences. Various unsettling incidents have been reported.
“They are extremely wealthy, and holding them accountable is quite challenging, as they have the means to resist,” explained Collin Bond of the Fabrikant Bond team at Compass, in an interview with the FT.
He recounted a situation involving a finance professional paying $30,000 per month who was eventually evicted. It was later discovered that he had a history of not paying rent in other cities and avoiding legal action, although he was taken to court in New York and forced to settle his debts.
There was also a case where a businesswoman paying $50,000 monthly requested that the property owner install high-tech Toto toilets. Upon her departure, it was revealed that she had stolen the toilets.
Furthermore, there were incidents involving two individuals heavily involved in cryptocurrency.
Brandon Trentham, an agent at Compass, shared a story with the FT about “Bitcoiners” renting a furnished townhouse for $55,000 per month. Despite the owners locking personal items in cupboards as per the lease agreement, the tenants opened the cupboards, removed the items, and discarded them as trash on the curb. Some items were recovered by the owners, while others were sold on Facebook Marketplace.
“They were devastated, as those items held memories of their children and family photos,” Trentham recalled. “When we confronted the tenants, they showed no remorse. They were young individuals with substantial wealth and said, ‘We asked for all personal items to be removed, so sue us if you wish.'”
