Unexpected Real Estate Demand Taking New York City by Storm
NEW YORK (TheStreet) --A recent real estate boom has taken New York City by storm as demand for senior assisted living and super luxury apartments in midtown Manhattan is increasing. Jonathon Miller, CEO of the real estate appraisal and consulting firm Miller Samuel Inc., and Deborah Cafaro, CEO of the healthcare-focused real estate investment trust Ventas, joined CNBC's "Power Lunch" to explain the demand.
"I think the most important issue here is that the super luxury condominium development movement that we've been chronicling over the last 5 years has been played out, and developers have to build something from an economic standpoint. So now what we're seeing is alternatives, we're looking at assisted living as another opportunity," Miller told CNBC's Melissa Lee.
The rents for such apartments have been reportedly valued at $20,000 which begs the question if the demand for such high-end real estate, especially for seniors, is being realized.
"Yes, it's a robust market. There's over 100,00 seniors living in Manhattan, and there are limited apartments with the kind of care and services that seniors need. It is clearly a product whose time has come given the rising age of the population," Cafaro explained.
Moreover, "It's a tremendous value proposition for seniors and their families. When you think about the amount of cost there is to keep up a home and then also having to pay for services that many seniors need particularly, over age 85, it's a tremendous bargain," Cafaro added.
"Logically, it's the right move in the sense that very high-end of the development already peaked 2 years ago, and we're only now accepting it and coming to the realization," Miller concluded.
Miller also told CNBC that this is not uncharted territory in terms of rent, as Manhattan already boasts complexes that value nearly $100,000 per month in rent.