Related Companies, owner of the posh Monterey rental apartments located on the Upper East Side of New York, has agreed to sell the building to Crammeby's International Group for around $250 million. It was listed for sale in January.
According to Bloomberg, the transaction is a hush-hush matter. The building operates under an 80/20 scheme. Around 80 percent of the apartment's units are offered for rent at the market rate while the remaining 20 percent are reserved for tenants whose income is not more than 50 percent of the area's median income. The eligible income for this program is limited to $41,500 for a four-head family.
In return for the affordable units, developers get tax-exempt bonds from the City's Housing Preservation and Development department, which they use to finance construction. For Monterey the bonds (mortgage loans) are set to mature by 2019. Now that a new entity is taking over the building, they have the option to pay off the entire mortgage loan and end the scheme.
The Monterey is a 522 unit luxury condo building. The 32-story building was completed in 1992 and since then, it has been one of the most sought-after luxury rental apartments in the city. The tower offers 24/7 concierge services, a rooftop sun terrace, a large swimming pool, a central private barbeque terrace and a state-of-the-art gym. The place also offers a private entertainment lounge and is also pet friendly. Each condo in the building has large windows, spacious rooms and kitchens with modern fittings, marble bathrooms with tri-view mirrors and exclusive vanities.
In addition to the services, Related provides the luxury of a "Personal Assistant" to help tenants with the moving, packing/un-packing, planning and home decoration etc.
Rents in the building (at market rate) range from $2795 for a studio to $5900 for a two-bedroom condo.
Currently, the Manhattan real estate market is 'insane'. A recent report released by Douglas Elliman stated that median apartment rates in New York have gone up 5.9 percent from the beginning of 2013. The number of properties that went under contract the past three months increased by 15 percent. Sellers are gaining confidence in the emerging market as well. Around 799 listings saw a spike in their prices accounting for a 27.6 percent total hike.
Commenting on the tremendous activity, Sofia Song, vice president of research at Streeteasy.com said:
"2013 is shaping up to be the "Year of the Frustrated Buyer". You have a lot of pent-up demand. You have a lot of people feeling like if they don't act now, they'll miss the boat. They want to take advantage of historically low rates and they don't want to be priced out of the market."