Manhattan walk-up properties experience popularity increase

Walk-up apartments in Manhattan have gained popularity.

More investors and property management companies in New York City gained interest in the walk-up multifamily market in recent months, as these are typically affordable purchases and offer alternatives to the typically expensive rental property offered in the city, according to The New York Times.

More than 70 walk-up properties were sold in Manhattan during the second quarter. This was far greater than the 33 purchased in the second quarter of 2009, according to the news source, citing a report from Eastern Consolidated. Sales during the first half of the year totaled nearly $640 million, which was more than 200 percent higher than the volume in the first half of 2009, which was $210 million.

Much of the reason behind the popularity of the property-type in recent months was due to Manhattan's low vacancy rates and very high rental prices, the paper noted. Some residents have been concerned about the state of the economy and the housing market, which has made some people hesitant to take advantage of the housing market.

At present, a large portion of these properties have rent regulated apartments, but if the renter dies or moves out, it will be possible for the property management company to make major changes to the property, the news source explained. Being able to raise the price of the room to the average rate on the market, as well as remodel the property, can prove to be lucrative.

"We think that there are a lot of potential tenants who are coming out of high-end rental buildings with doormen and elevators that are looking for a similar feel but at a more affordable price," Martin Nussbaum, founder of Silverstone Property Group, told the news source. "It is very capital-intensive for the first two years or so. Then, hopefully, we will see a significant increase in rent."

These properties are actually preferred by many investors, the news source added. Much of this is due to these buildings operating more efficiently than larger buildings with elevators. In addition, the rents are not much different when compared to other properties if it is bought closer to the market rate. Fees may be lower for the property manager if they acquire a multifamily rental than if they buy an office building, which could be another selling point.

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