By Amy Hoak, MarketWatch
Love your dog? Rent an apartment unit in MiMA in New York, and you’ll have access to Dog City, the building’s haven for canines, complete with indoor and outdoor play areas and people to walk, groom, shampoo, massage and train your dog. Vet appointments and doggy play dates also are available.
Hate shopping for groceries? Lease at 8500 Burton Way in Los Angeles, and the staff there will do your grocery shopping for you, a feature called “pantry service.” Or just order room service instead.
Fed up with your humdrum in-home gym? K2 in Chicago has an indoor basketball court and a massage room. NEMA, under construction in San Francisco, has a Jay Wright-designed gym and an energy solarium for yoga.
It isn’t new for apartment buildings to be customized with common areas including pools, gyms and game rooms. But some high-end buildings are outdoing each other with services and features that rival the most upscale hotels. And residents are willing to pay a premium to live there.
Dog City in One MiMA Tower in New York.
The trend of constructing high-amenity buildings started about a decade ago, said Leslie Piper, consumer housing specialist with Realtor.com and a real-estate agent in the San Francisco market.
“We really started seeing the shift in the past 10 years with people working from home and doing a lot more traveling,” she said. “Buildings are being built with a lot more services or amenities than people were looking for,” perks that frequent travelers are used to from staying in luxury hotels.
These aren’t your average renters. These are high earners, people who could easily afford to buy a beautiful home instead of rent an apartment.
A big reason they’re renting comes down to flexibility it affords them.
Maybe they’re new to town and aren’t sure where they want to buy a home. Perhaps they are anticipating work will move them in a year.
In some cases, they’re affluent empty nesters considering a move from the suburbs to a city’s downtown, yet are unsure whether they’ll like it—and where exactly they’d buy their eventual retirement home.
But renting doesn’t mean they’ll skimp on their lifestyle.
Aside from the pools and cabanas, screening rooms and catering kitchens, there is often a sizable service component to these buildings.
A technology concierge at MiMA in New York can help residents connect all their electronics, said Daria Salusbury, senior vice president of luxury leasing operation for Related Companies, the developer behind MiMA, where a studio apartment rents for $3,495 a month and a two-bedroom rents for $6,350. The top floors, called One MiMA Tower, have a separate entrance and rents go up to more than $20,000 for a penthouse.
At 8500 Burton Way, a building where rents start at $5,000 for a one-bedroom, concierges have done everything from planning a bachelor party to shipping vehicles around the world for residents.
Many of the buildings also try and promote a sense of community, offering events where residents can socialize and get to know their neighbors—something that people don’t always have time to do on their own.
A new attitude on renting
Developers say that interest in these new buildings may signal a greater trend: A post-housing-crash disinterest for owning, even among the elite.
8500 Burton Way, Los Angeles.
“People aren’t consumed with owning,” said Randy Fifield, vice chairman and principal of Fifield Companies, a co-developer of K2 in Chicago, where rents start at $1,650 for a 481-square-foot studio and go up to as much as $8,500 for a 2,010-square-foot penthouse. “Cars, clothing, places to live, these are all fungible things today,” she added.
So they lease their Mercedes-Benz and borrow their upscale clothes through the website Rent the Runway, she said.
And they rent their homes.
Competition to lease higher-end homes in Los Angeles is fierce—especially as the for-sale market improves and fewer private homes are listed for sale instead of rented out, said Rick Caruso, founder and chief executive officer of Caruso Affiliated.
“To lease an upscale home in L.A. is almost impossible,” Caruso said. Caruso Affiliated is the developer behind 8500 Burton Way in L.A.
After the housing bust, more people of all means view owning a home as a long-term proposition, Piper said.
When today’s home buyers do make a purchase, they’re often planning on staying in the home for 10 or 20 years—a plan that will help them take advantage of low mortgage interest rates they can secure today for decades into the future, Piper added. It is a different mentality than years past, when it was typical for people to buy a condo apartment, then upgrade to a bigger single-family home, and then perhaps a bigger home than that—sometimes without much concern for how long they’d stay.
New attitudes about owning are showing up in the numbers: The homeownership rate was 65% in the second quarter, according to the U.S. Census Bureau. In the second quarter of 2004, the rate was 69.2%.
To be sure, reduced home buying is also—and probably more so—a result of tighter mortgage underwriting since the housing crash. Plus, many Americans took hits to their credit scores and earnings during the recession.
But it’s also probable that those capable of buying have shifted their attitudes about the minimum time they’d need to live in a home for a purchase to make sense. And developers are banking on the fact that Americans will remain conservative about buying homes for the foreseeable future, opting to rent for a spell instead.
“People have taken a greater look at [renting] since 2008 when the whole downturn occurred. This is here to stay,” Fifield said.
Amy Hoak is a MarketWatch editor and columnist based in Chicago. Follow her on Twitter @amyhoak.