Manhattan developer ramps up perks to sell last few condo units

New York

COMMIT to buy a condo at one of Toll Brothers' Manhattan towers, and the company will pay to break your apartment lease. Agree to tour a unit at the builder's Tribeca project, and they'll send a car to get you.

As New York condo developers struggle to attract buyers amid mounting competition, Toll is getting creative. It's reaching out to renters as a potential new source of demand and rolling out some unusual perks at buildings where a majority of the apartments have already sold.

Toll is doing what it can to get to the finish line on some of its longest-running efforts - before thousands more newly constructed units reach Manhattan's already saturated market. "It's been a long ride for some of these developers," said Jonathan Miller, president of New York appraiser Miller Samuel. "The lack of certainty might be pushing this drive to exit quickly."

In its pitch for 121 E 22nd St, on the market since 2017, Toll says: "Why rent luxury when you can own it?" The company is offering to pay moving expenses and penalties of breaking a lease for buyers who sign a contract by Labor Day, according to marketing materials for the project.

Toll also pledges to cover closing costs on the eventual purchase.

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The incentives are aimed at renters at a time when many leases come up for renewal, and record-low mortgage rates may encourage some of them to become buyers, according to Michael Duff, marketing director at Toll Brothers' City Living division.

"Across our NYC portfolio, we've noticed increased interest of potential homebuyers coming from luxury rental buildings," Mr Duff said.

The 133-unit tower on 22nd Street, one block from prestigious Gramercy Park, has sold 75 per cent of its units. Apartments still listed for sale include a five-bedroom duplex seeking US$11 million and a 616-square foot studio with a price tag of US$1.3 million, according to StreetEasy.

There's just one unit remaining at 91 Leonard St in Tribeca, where sales started in 2017, Mr Duff said.

Still, Toll is offering to pay three years of real estate taxes and common charges to the eventual buyer of that three-bedroom apartment on the 12th floor, priced at US$3.75 million.

It's also promising a free storage unit, and a car ride to brokers and their clients interested in seeing the property.

Manhattan's sales market is seeing a revival as buyers awaken to the chance of finding a bargain. Last month, contracts to purchase condos jumped more than sevenfold from a year earlier to 553, according to Miller Samuel and Douglas Elliman Real Estate. For condos listed at US$5 million to US$9.99 million, there were 42 deals, up from just five in March 2020. But there's still a lot of inventory coming. Manhattan has an estimated 8,400 unsold new development units - many of which haven't yet been listed for sale, according to development data firm Marketproof.

And the borough's rental market, glutted with nearly 20,000 vacant apartments at the end of last month, is proving a stiff competitor for deal seekers' attention, as landlords offer record levels of incentives and discounts to attract tenants.

That's likely putting pressure on builders with just a few remaining units to take what they can now and move on, Mr Miller said. At Toll's nearly sold-out projects, "there's clearly urgency in some of these creative new concessions," he added. "This tells us that they're not willing to wait and see whether the market improves." BLOOMBERG