Related Cos., the New York developer founded by billionaire Stephen Ross, is putting one of its largest Manhattan apartment properties on the market as investor demand for multifamily buildings grows amid rising rents.
The company is seeking to sell the Upper East Side’s Monterey, a 519-apartment tower that may sell for at least $500,000 a unit, according to a person who has seen the marketing materials and asked not to be named because they are private. Joanna Rose, a Related spokeswoman, referred questions to the building’s sales broker, Doug Harmon, senior managing director at Eastdil Secured LLC.
The Monterey, located on East 96th Street near Third Avenue, “provides a rare opportunity” to acquire a large number of units in a “high-caliber, institutionally owned and well-maintained property,” Harmon, who is marketing the building with colleagues Adam Spies and Jean Celestin, said in an e-mail. He declined to discuss the financial details of the property or the price Related is seeking.
The Monterey, built in 1993, is a so-called 80/20 building, in which 80 percent of the apartments are rented at market rate and the others are reserved for tenants who earn no more than 50 percent of area’s median income, according to guidelines on the website of the New York City Housing Development Corp. That limits eligible income to about $41,500 for a family of four.
Under the program, developers agree to set aside the affordable units in exchange for tax-exempt bonds to finance construction.
Approaching Peak
Market-rate apartments advertised for rent at the Monterey range from $3,125 to $3,795. The 29-story tower includes amenities such as a pool, landscaped rooftop and fitness center, according to the property website.
Manhattan apartment rents are poised to surpass their 2006 peak in the second quarter as tenant demand outstrips the available supply of new units, according to Jonathan Miller, president of New York-based appraiser Miller Samuel Inc.
The median monthly rent climbed to $3,150 in December, up 0.8 percent from a year earlier, Miller Samuel and brokerage Douglas Elliman Real Estate said in a Jan. 10 report.
In 2012, the dollar volume of Manhattan apartment-building sales more than doubled from a year earlier to $8.9 billion, according to Real Capital Analytics Inc., a New York-based research firm. About 389 properties changed hands, twice as many as in 2011.
Investors paid an average of $395,000 a unit in 2012, 13 percent less than the previous year, Real Capital data show.