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Listing Photo Larceny

Due in large part to the advent of the internet, the real estate community has recently been entangled in issues surrounding agents stealing one another’s listing photos. A REBNY and Department of State rule stipulates that one may only advertise the exclusive listings of other agents if they have express written permission to do so. However, this rule is now being ignored by many and whether this is due to maliciousness or naïveté is a tough question. 

In any case, these photo offenses are not going unnoticed and the repercussions can be severe. I have heard of recent lawsuits in which individual brokers are being sued for as much as $150,000 per image. Photos have been stolen from both the exclusive brokerages’ websites as well as StreetEasy despite the fact that the images in question were copyrighted through the Library of Congress. This fact is what is now allowing for a lawsuit.

Among the real estate community, it was unprecedented until very recently to sue for copyright infringement in cases such as these. Typically, brokers didn’t even feel the need to copyright their listing photos in the first place. Those brokers that discovered others were stealing their photos would simply ask the offending party to take them down and then forbid them from showing that apartment or any of their other listings. However, in the vast landscape of online real estate listings that exists today, it seems to be a bit more cutthroat, meaning that brokers need to take steps to protect their listings.

Although it may have been considered overkill in the past, I would now recommend that brokers copyright their exclusive listing photos through the Library of Congress. Furthermore, it would be prudent to perform regular internet searches for one’s listings to ensure that copyright law isn’t being violated. With the recent confusion surrounding to whom certain photos belong, it’s best to take precautions that will help to protect one’s business from any harm, regardless of whether or not it is intentionally motivated. 

A New Normal for Leasing

The beginning of 2018 has signified a bright new normal for apartment leasing in Manhattan, and the city’s brokers have breathed a collective sigh of relief after the anomalously poor leasing years of 2016 and 2017. Due to an uncertain post-election economy, potential tenants were reluctant to sign new leases during this roughly two-year period. Although the economy has now stabilized and leasing activity has certainly picked up, Manhattan brokers are now faced with a new challenge: competition from outer boroughs. 

Thousands of new rental units are coming on the market in both Brooklyn and Queens, and people are flocking to them. According to The Real Deal, in Brooklyn, the number of new leases increased this past January by 42.1 percent and in Queens, the number went up by 43.2 percent. Over the short term, the Manhattan rental market looks very promising and a strong summer for leasing activity is expected. Due to the forthcoming shutdown of the L train as well as the debut of the 2nd Avenue subway line, transportation options will likely benefit those planning to live in Manhattan in the near future.

Over the long term, however, Brooklyn and Queens are here to stay and will most certainly be taking some market share from Manhattan. For many tenants, especially younger ones, Manhattan isn’t as desirable as it might have been at one time. As with most changes, there will likely be an adjustment period as brokers learn to navigate the shifting market. However, it remains to be seen exactly how strategies will change and in turn, what the new normal for leasing will become.

Middle & Super-Luxury Leasing in the City

Recently, I leased a stunning townhouse in Greenwich Village that by all accounts would fall under the category of super-luxury. Along the way, I learned a few lessons regarding how today’s sales and rentals are connected and how landlords can best navigate these ever-shifting markets. This particular townhouse is located in the heart of Greenwich Village and the tenant is paying ten percent less than the previous tenant. In addition, the landlord paid the broker fee as opposed to the tenant. These factors serve to illustrate a larger trend within the world of high-end rentals in New York City: the luxury rental market is not what it used to be. 

High-end rentals in the city are generally divided into two categories: middle-luxury which is comprised of units that rent for between $4,000 and $8,000 per month and super-luxury which is comprised of units that rent for more than $8,000 per month. Super-luxury rentals and sales markets in New York City are intricately connected in that these rentals are often used solely as places to stay when one has sold their apartment and is in the process of buying another. Therefore, when the sales market is slow there is less of a need for the “in-between” places offered by the super-luxury rental market. This differentiates New York City from virtually every other city in the country wherein a booming sales market signifies a decrease in rentals.  

Currently, both the middle-luxury and super-luxury markets are struggling but middle-luxury has been hit especially hard as is always the case when there is uncertainty in the market. Buying an apartment is significantly riskier for residents of middle-luxury units than those of super-luxury ones. My prediction is that both luxury markets will recover within the next year and my advice for landlords would be to continue offering concessions such as a free month’s rent that will allow them to rent as many apartments as possible in the current leasing climate.

 

The Rise of Co-Living & What it Means for Traditional Real Estate

Between WeLive, Ollie, Webster Apartments, Common, Quarters and more, co-living buildings are picking up speed in the city. With approximately 650 of these residential units in Manhattan alone and even more in Brooklyn and Queens, landlords attempting to lease standard two or three-bedroom shared apartments are facing a new obstacle.

Co-living buildings appeal mainly to millennials and particularly those that don’t want to commit to a yearlong lease. At WeLive Wall Street, for example, tenants can stay for as little as one night or as long as an entire year. These types of flexible lease arrangements appeal to many people who aren’t sure exactly how long they will be in the city.

Often, the cost of rent in a co-living building is fairly similar to what one would pay for a room in a shared apartment. However, the appeal of co-living lies in the community atmosphere and the building amenities. Although residents in a co-living space typically have to share a bathroom, there are often communal lounges, game rooms, and workspaces. Some buildings even serve two meals per day and feature services such as regular housekeeping free of charge.

Although potential tenants in a co-living building often have to undergo a financial check, the process is still far less extensive than in a shared apartment situation which can involve guarantors and loads of paperwork. In years past, these shared two and three-bedroom apartments were a number one cash cow for many of the city’s brokers. The rise of co-living means that there are certainly not as many people competing for these shared apartments at any given time. However, co-living arrangements may be an attractive option for those who need somewhere to stay while they take their time finding a more permanent apartment instead of rushing to sign a lease.

Landlords and the Power of Brokers

When I started out in the world of residential real estate 13 years ago, about half of the city’s apartments were leased by brokers while the other half were handled by in-house agents affiliated with building management firms i.e., “building specialists.” Third-party brokers were able to show listings in buildings that had in-house leasing staff, but never exclusively.

Today, about 80 percent of the apartments in Manhattan are listed by either an exclusive third-party broker or a building’s in-house leasing representative. Landlords have learned that leasing in-house is a lucrative revenue source. There is also a much greater degree of control that may be exercised by landlords when their apartments are only being shown by in-house leasing representatives. This level of oversight is especially important to medium-sized portfolios, for which the management teams are concerned not with obtaining the highest rents or the quickest turnover, but rather attracting top-quality tenants.

In addition, the caliber of residential rental brokers has greatly increased over the past 10 years. Although it wasn’t always a celebrated occupation, the generation of brokers now in their 30s and 40s has brought a new mentality to the profession, one that often requires a higher level of education as well as a real understanding of strategic and analytic approaches to real estate. More than ever before, landlords are recognizing the power of brokers and harnessing the knowledge of this new generation of real estate experts to benefit both sides.

Thoughts by:
Adam Frisch,
Managing Principal