Manhattan Real Estate Amenities and Fees Are Rising
That movie screening room, roof deck and pet spa you thought were included in your rental or condo? Check twice, as Manhattan is seeing a new wave of fees and charges for amenities-all those wonderful things that were included just a few years ago are proving a little harder to pay for.
“These days, with the economy being what it is, everybody is trying to be a little creative at trying to generate additional revenue,” says John Janangelo, president of Bellmarc Realty’s property management division, in the Real Deal. That says a lot about where the Manhattan market is right now.
Amenities and Rentals
Fees for amenities at rental buildings have always existed but are now being expanded to include some typically free features. While things like roof decks, pools, fitness centers, party spaces or playrooms were usually included just 5 years ago, many places are starting to charge fees out of necessity.
Some rental buildings appear to be in transition, offering amenities for free for a limited time and planning to start charging for them in the coming year.
The Real Deal notes that 808 Columbus in the Columbus Square complex has an 80,000-square-foot roof deck, saltwater pool, playroom and fitness center. It will begin with a small fee for residents that they plan to increase yearly. Truffles Tribeca has a gym, theater and the Trufflesprivé lounge. 454 Manhattan Avenue in Harlem includes a roof deck, bike storage and other amenities free for one year, rising to an annual fee of $175.
In a down market like this where people are staying sharp for the best deal they can find, raising or creating fees may be necessary when buildings need the money, but they can also make renting or selling a property even harder.
Amenities and Condos
It’s normally assumed that monthly common charges cover day-to-day expenses and include amenities- that is becoming less common as buildings find they can’t cover their operating costs. There are a myriad of reasons, none new but all more acute: units are going unoccupied, tenants are unable to pay, inexperienced developers inaccurately estimated costs, sloppy construction during the good times is up for repair. Josh Guberman of Core Development Group is quoted as saying, “What we’re seeing a lot of is new developments starting out years one or two at 20 to 50 percent above the [cost] projections.” Wow.
Condos without enough money need to raise amenity fees, raise common charges, or mimic the co-op “flip tax.” Any of these essentially raises the cost of living in the building and makes the apartments tougher to sell, so some condos are moving toward a transfer fee, usually somewhere between 1 and 2%. Some are raising fees for storage units, move-in and move-out fees, or creating appliance fees- certainly the less enjoyable side of being creative.
What effect amenity fees and others will have on specific buildings remains to be seen, but it is certainly a new reality of the market.
« Manhattan Real Estate: The Plaza Hotel Sees Dropping Unit Costs and Rising Hope | Home | Tishman Speyer Properties and BlackRock Realty Default on Stuyvesant Town and Peter Cooper Village »
Leave a Comment