These apartments go for more than $100,000 a month. Why the superrich are deciding to rent rather than buy. (2024)

But two diminutive Manhattan buildings have quietly climbed to another pinnacle of the luxury residential business by commanding some of the highest rents ever seen.

Maison Hudson, at 401 West Street in the West Village, and Fasano Fifth Avenue, at 815 Fifth Avenue on the Upper East Side – each only 10 units in size – charge more than $100,000 a month for some of their apartments and are virtually full, according to people who work on the projects.

In doing so, they have etched out a new niche at the most rarefied heights of the residential market, in part by persuading buyers who might have lavished millions of dollars – or more – to rent instead.

The projects show how the seismic shifts that have rippled through the real estate market in the aftermath of the pandemic and a spike in interest rates have also reshaped behavior among extremely well-heeled home buyers.

"Post Covid, people realize that their time is finite on this world, and they want to have as much experience as they can," said Tyrone McKillen, a luxury broker and homebuilder based in Los Angeles said.

The response for some, he said, is to live a more itinerant lifestyle. Renting a home versus owning is more conducive to that.

"There's such thing as billionaire's guilt – having too many homes that they don't use," McKillen said. "You feel guilty for not using it so you're planning all your trips around the same place. Whereas if you don't have that, you can stay wherever you want."

McKillen, whose brother built a Bel Air mansion that McKillen later sold to the superstar music couple Jay-Z and Beyonce for $88 million in 2017, said he too is interested in developing an elite rental in the Los Angeles area.

"There's definitely a market for that," McKillen said.

Expensive marble, high-end millwork — and a lot of it

Erin Boisson Aries, a real estate advisor and broker at Douglas Elliman who is the exclusive marketing and sales agent representing Maison Hudson and Fasano to wealthy clientele, said that rental rates, on a per-square-foot basis, at the buildings exceed what other top-tier apartments have charged by a wide margin.

Although 220 Central Park South is not a rental property, owners there – as they do at other condo properties – sometimes choose to put their units up for rent. Aries said that asking rates there and at other condo buildings at the apex of the for-sale market, such as 432 Park Avenue, can range as high as nearly $300 per square foot.

In comparison, Maison Hudson's penthouse, which has just been made available to the market, is asking for nearly $600 a square foot, or $120,000 a month. Four duplex units at Fasano rent for $130,000, a rate that amounts to nearly $500 per square foot.

"It certainly breaks all records by a significant margin and I think it speaks to the scarcity of this kind of product that caters to short-term clientele at a very high level," Aries said.

Part of Maison Hudson's and Fasano's premium is the convenience they offer. Renters at a condo building generally need to receive permission from that property's board – a process that can be lengthy and probing.

The projects also boast a combination of attributes that even top-end condos can't match: furniture and finishes fit for an elite luxury home, the food and services of a five-star hotel, and locations in some of the city's most coveted neighborhoods.

Mikhail Kurnev, who helped oversee the Maison Hudson's construction for its London-based developer Wainbridge Capital, said that it featured "expensive marble, high-end millwork, and a lot of it."

"We have don't have much paint in our building,'" Kurnev said. "Everything is covered with something, wall paper, stone, and leather."

He said the developer tapped Giorgetti, an Italian firm, to fully outfit the building and its residences with custom made furniture.

"It's just a lot more money spent on design and construction," he added, declining to specify the project's cost.

Kurnev said that a 29-seat restaurant will soon be announced for a 2,000-square-foot space on the ground floor of the property.

Functioning like a hybrid between a high-end hotel and a permanent condo residence, the projects have drawn a variety of residents aside from the typical wealthy clientele, Aries said. Patrons include diplomats, actors and performers, individuals in town for medical procedures, and even students from wealthy families.

Aries said the average stay at Fasano, which opened in 2022, was between three and six months and that the property has had strong occupancy, although she declined to provide an exact rate.

Maison Hudson, which opened at the start of the year, has been about 75% occupied, according to Jacques Oudinot, the chief operating officer of the Collection, the hospitality arm of Wainbridge that manages the property and others owned by the company in Paris, London, Saint-Jean-Cap-Ferrat, St. Barths, and Courchevel.

A guest who rented three apartments for four months has been the longest stay so far, Oudinot said.

Exuberant returns for patient capital

Drawn by the promise of quick and potentially large profits from condo sales, few developers choose to build rental apartments on sites that might otherwise be prime for condo development. Kurnev said that Wainbridge, however, had a different calculus.

Condo sales are prone to volatile dips in the market. Rental projects, on the other hand, while less lucrative upfront, offer more stability for owners with a long time horizon.

You can "achieve exuberant returns" over time, he said, and "it's very predictable."

At Maison Hudson, Wainbridge had previously planned to join the building's penthouse with a unit on the floor below and offer the combined apartment to buyers for $23 million in order to recoup some of its development costs. It recently reconsidered the plan based on the success of the building's rentals, Aries said, and is now offering the penthouse unit for rent.

Based on the success of Maison Hudson, Wainbridge is planning identical projects in Los Angeles and Miami Beach, according to Oudinot.

Some observers, however, imagined limited opportunities to scale such a exorbitantly priced concept.

"The demand is thin and high and very volatile" at the top of the residential market, according to Nancy Packes, a real estate advisor and broker.

"It's about as real as a unicorn," she said. "That makes it hard to posit this as a business model."