More 30 and 40 year olds need guarantors to rent in NYC

As New York City rents rise and wages remain mostly stagnant, it’s become even more difficult for individuals to afford to live here—at least not without some sort of help. That’s why if you are a student, recent grad, foreigner, or retiree, you’re likely to turn to a guarantor who can pay the rent in the event that you can’t.

However, these days, people seeking guarantors don’t fit the usual profile. Increasingly, people in their 30s and 40s are using guarantors when relocating to New York or simply moving to a new apartment.

From 2010 to 2017, NYC asking rents increased by 3.9 percent annually compared to a 1.8 percent annual increase in wages, according to StreetEasy’s 2017 Rent Affordability Report. And the Census Bureau reported this month that median household income reached $61,372 in 2017.

NYC landlords typically want renters who earn at least 40 times the monthly rent on an apartment. That means an individual earning the median wage can afford to pay just $1,534 per month—significantly below the median rental prices of $3,400 for Manhattan, $2,950 for Brooklyn, and $2,995 for Queens, according to the August 2018 Elliman rental report.

“We have seen a continuing increase in the issuance of guarantees by the Insurant Lease Guaranty Program in the last few years for this group of renters,” says Jeffrey L. Geller, vice chairman and chief operating officer of Insurent, a New York City lease guarantee company (and Brick Underground sponsor). This population may not have guarantors, who are required to earn 80 times the monthly rent and have excellent credit history, he adds.

Insurent’s criteria for U.S. individuals is a minimum annual income of 27.5 times the monthly rent, versus the 40 to 50 times required by NYC landlords, or cash or marketable securities of a minimum of 50 times the monthly rent and decent credit.

“We’ve definitely seen apartments double in costs from what they were 10 years ago and have not seen salaries double. People have to rely on the kindness of their family or sometimes even their bosses to get housing,” says Molly Franklin, a salesperson for Citi Habitats. “They’re making what used to be a livable income in New York, maybe $80,000-$90,000, but depending on the neighborhood, a studio can easily go for $2,500. Which is fairly high for a studio.”

What’s also changed is the increase in people who don’t have that IBM or Google job and who are working as independent contractors. “Proving income is doable, but the landlord wants to see one more step of security, a guarantor, because it’s projected income as opposed to an agreed-upon income,” Franklin says.

And these days, jobs can evaporate overnight. A couple of Franklin’s older clients needed a guarantor because they had decided to close their business, and this negatively affected their personal credit. Even though they had money because they were selling their house, their credit took a hit, “so it makes sense to have an ace in the hole if you can,” she says, adding that a colleague had an artist client in her late 50s/early 60s who also had to use a guarantor.

“It’s a broad swath of people now, it’s not just students anymore and not just international clients who haven’t built U.S. credit yet,” she says.

Some people using guarantors are in their 30s and are postponing owning because of economic conditions.

“Last year I saw a lot of parents contributing to down payments. This year, because of a lot of uncertainty, the [unknown] tax ramifications, and people waiting for the buyer’s market [to manifest], people have been holding off,” Franklin says, meaning their children will continue to rent a little longer.

Still, landlords are not backing down on their requirements, even in a softening market.

“In the multifamily segment, we’re seeing an issue with occupancy rates, where in certain metro areas [including New York], we’ve had to evict people for not paying rent,” says Jeff Holzmann, managing director of iintoo USA. “As a result, the management company imposed thresholds before offering a lease in the first place.”

Holzmann says that increasingly fewer people are able to meet the criteria of demonstrating annual income that is a certain amount times the monthly rent, so they’re asking for guarantors. “It’s a nationwide trend, but even in Brooklyn, we won’t give a lease unless an individual can meet the increased criteria.”

He adds that the leasing agents don’t like it because they make a commission each time they lease an apartment out, so the higher standards are inhibiting their ability to close deals. “But if you have tenants who can’t pay, you’ll quickly go out of business,” Holzmann says, adding that it’s an issue for people coming from other parts of the country.

“They’re professional, employed, yet overwhelmed by prices in New York City, which are very expensive,” he says. “Sometimes they’re squeamish about the demands. I’ve seen grown men literally cry when they have to produce all this evidence and guarantors. But in this city there are a lot of scammers and a lot of turnover, and you have to impose high standards.”


Blackstone LP: looks to manage $1 trillion by 2026

Blackstone Group LP, the world’s largest manager of alternative investments such as private equity and real estate, said on Friday it could be overseeing $1 trillion in assets by 2026.

The firm currently manages $439 billion, a five-fold increase since it went public in 2007.

The ambitious target highlights how Blackstone, like many peers, is eager to take advantage of healthy investor demand for private equity and other forms alternative asset management.

There is, however, concern in the industry that fundraising will suffer when the next economic downturn comes, as it did in 2009 during the financial crisis.

“Now you may ask … have you tapped out? Are you hitting some ceiling? The answer to that is a definitive ‘no,'” Blackstone President and Chief Operating Officer Jon Gray said at an investor day event, the firm’s first since 2014. Gray was promoted earlier this year from head of Blackstone’s real estate division.

In a presentation, Blackstone said assets under management could hit $600 billion in the next two years or so, $800 billion in four to six years and pass $1 trillion in eight-plus years.

The outlook underscores comments by Blackstone Chairman and Chief Executive Stephen Schwarzman in July about the alternative asset management industry entering a fundraising “super cycle,” and his belief that Blackstone still has plenty of room to grow.

A growing asset base will boost the amount Blackstone earns from management fees, typically 1.5 percent to 2 percent of the assets it manages. These fees tend to be valued at a premium by investors because they are considered more stable than performance fees, Blackstone’s other main revenue stream.

In its presentation, Blackstone said it had a “clear path” in the next two years or so to achieve at least 50 percent growth in fee-related earnings.

Blackstone shares rose as much 5.1 percent, reaching $39.70, their highest since July 2015.

In January, Blackstone agreed to buy a majority stake in the Financial and Risk business of Thomson Reuters Corp, the parent of Reuters News, in a $20 billion deal. Reuters News will remain part of Thomson Reuters.

Airbnb Wants SEC Rules Changed To Give Hosts Company Equity

Hospitality service Airbnb provides an online marketplace that allows users to rent out their houses, properties and spare rooms to travelers.

The service reported 29 million users in the U.S. and Europe in 2017, and 33 million so far in 2018, according to a study conducted by

What Happened

Airbnb sent a letter Friday to the Securities and Exchange Commission asking for clearance to grant equity to the company’s hosts, according to Axios.

This letter addressed the potential of revising a Securities Act rule to add the category of “gig economy worker,” since the private company is only able to grant equity to investors and staff.

Why It’s Important

If approved, the U.S. government would likely consider the tax implications of private stock transfer, on top of a revision of the Exchange Act, according to Axios.

According to the SEC website, Section 12(g) of the Exchange Act “establishes the thresholds at which an issuer is required to register a class of securities with the Securities and Exchange Commission.” Per the rule, an issuer is required to register a class of equity securities under the SEC if it has more than $10 million of total assets, or the securities are “held of record” by 2,000 or more people.

“Gig economy” positions have increased in prominence. According to an August Forbes study, 36 percent of Americans are employed in the gig economy — which amounts to 57 million workers.

What’s Next

Airbnb follows companies such as Juno and Uber that have also asked for revisions to SEC rules.

“Airbnb is a community-based company and we would be nothing without our hosts,” Airbnb CEO Brian Chesky told Axios. “We would like our most loyal hosts to be shareholders, but need these policies to change in order to make that happen.”

Smart tech finds home in senior care

Forget rotary phones and dial-up internet. Modern-day senior housing could just as likely to feature voice activation and virtual reality, with the technology industry turning attention to an often-overlooked generation of customers.

And with an aging population bringing a growing demand for senior-living communities in Connecticut and beyond, companies that build them, including Westport-based Maplewood Senior Living, are following a growing trend as they look to provide the latest in quality-of life technology for their residents.

“We are taking every opportunity to inject all sorts of new technology from iPad to smart boards to even telemedicine,” said CEO Greg Smith, touring one of the company’s newest developments in Fairfield. “The technology that we’re putting into this building is something that is truly unique for us and even for the industry itself.”

Expanded experiences

As development of Maplewood Southport continues, the company is integrating tablets and smart screens, Amazon Alexa with voice activation, and even virtual reality into the community’s daily operations.

With locations in Connecticut, Massachusetts, New York and Ohio, the upscale senior living company will be debuting its 98-unit facility at 17 Mill Hill Terrace, in Fairfield by June on a 27-acre parcel just off Interstate 95.

Among Maplewood’s amenities are “smart apartments” that allow residents to control appliances including lights, temperature and the television. They can also let people communicate with staff and family while providing information on dining menus and scheduled events upon command.

“We’re leveraging Amazon and Alexa technology to do that now,” Brian Geyser, Maplewood’s vice president of clinical innovation and population health.

Virtual reality systems, provided by Rendever, can be used for recreational tours as well as in some cases as therapy for residents with dementia, offering the possibility of people visiting childhood homes or other much-loved locations.

“It’s so pleasurable for them to go back in time because that’s where they feel they are in their mind, and so we’re able to bring them back in time using virtual reality,” Geyser said, adding that the company has plans to retrofit some of its newest technology features into its existing communities.

At-home care

Technology isn’t new to the senior and assisted living industry, but it has grown as a crucial component to improving care, for people at home or elsewhere, according to industry experts.

“We’re finding assisted technology is incredibly helpful as part of an overall plan of care to keep a person in their home,” said Marie Allen, executive director of the Southwestern Connecticut Agency on Aging.

The Bridgeport-based agency focuses on improving the care of seniors through funding and resource programs geared toward allowing residents to age in place. SWCAA helps more than 3,500 people who are receiving at-home care with a combination of human assistance and technology including emergency response, video cameras, telemedicine and telehealth equipment and more.

That array of devices has recently extended into the smart-tech realm with companies like Apple and Amazon breaking new ground on ease of use.

Apple’s latest version of its smart watch serves as an example, with its electric heart sensor and new fall-detection feature that can summon help if the wearer is unconscious or immobilized.

“These are things that we never had in the past and couldn’t use to supplement care plans,” Allen said.

The growing list of devices has created a means for more cost-effective home care, according to Allen, who said people can receive nursing-home-level care from their homes for roughly half the price they’d pay to live elsewhere.

SWCAA is the state contractor for Medicaid, which Allen said helps pay for a variety of assisted living and emergency detection devices and software. “Tech is one thing that does cross all different demographics from the low income to the most affluent,” she said.

But even as tech finds new customers, generational difference remain. For many people, depending on devices and trusting them to do what they’re supposed to goes against a lifetime of experience.

“Everyone who is creating new products in the market that could have an impact on people who are 50-plus needs to understand that their design process is going to be different,” said Kyle Rand, co-founder and CEO of Boston-based tech company Rendever, which focuses on adapting virtual reality systems for seniors. “Because those people have grown up in a much different world.”

As San Francisco Real Estate Prices Spiral, Some Biotechs Look to the ‘Burbs


The two biggest areas for biotech startups in the U.S. are Cambridge in Boston and the San Francisco Bay Area. They’re also the locations of astonishingly expensive real estate. But they’re where biotechs seem to want to be because they’re close to talent, academic research institutions, and the attention of venture capital.

In the Bay Area, at least some startups are thinking about moving outside the area, at least a little bit, in order to control costs. The San Francisco Chronicle reports on several biotech companies that are settling some or all of their operations in Pleasanton, a suburb of San Francisco in Alameda County about 25 miles east of Oakland.

One of those companies is 10X Genomics, which has headquarters in Pleasanton, and decided to quadruple the company’s space to 200,000 square feet in the city rather than move it somewhere else. “Pleasanton is the sweet spot where you get the talent from all across the Bay Area and rents aren’t quite as expensive as San Francisco or the Peninsula,” said Serge Saxonov, co-founder and chief executive officer of 10x.

10x has a manufacturing plant in Germany, which it plans to keep, but the new site in Pleasanton will manufacture its products end-to-end, not just components, as in the German facility. This allows company executives to be more hands-on while having access to the region’s workforce that has the necessary specialized backgrounds in chemistry, biology, hardware and software.

This falls into the part of the Bay Area dubbed the East Bay, and it’s no stranger to biopharma companies. Others in the region include Roche MolecularBio-Rad Laboratories, and IntegenX, now owned by Thermo Fisher. The San Francisco Chronicle reports, “Lately, the region — though it doesn’t have the biotech cache of South San Francisco or the newness of San Francisco’s Mission Bay — has also been drawing smaller, newer and fast-growing firms that make critical hardware, software and technology used by biotech companies.”

Pleasanton is part of what is dubbed the Tri-Valley, which includes the cities of Pleasanton, Danville, Dublin, Livermore and San Ramon. From 2006 to 2016, these cities had a 35-percent job growth, higher than San Francisco’s 31 percent and Silicon Valley’s 19 percent.

Others in the area include Unchained Labs, which is a subsidiary of 10x, and Gritstone Oncology. Gritstone is located in Emeryville and in August, inked a collaboration deal with Cambridge, Massachusetts-based bluebird bio. It recently filed for an initial public offering (IPO) with plans to raise up to $91 million.

“We chose Pleasanton because I’ve been in life sciences for more than 20 years, and the whole time I was doing the crazy commute to the valley (Sunnyvale and Santa Clara),” Tim Harkness,founder and chief executive officer of Unchained Labs, told The San Francisco Chronicle. “I wanted to stop that craziness, and I didn’t think I was alone.”

The Chronicle writes, “It was risky to base the company in Pleasanton three years ago, said Harkness, who is also a founding partner at Tri-Valley Venturesa venture fund created last year to back early-stage technology, IT and life sciences firms. But it turned out to be a competitive advantage, he said, because the location made it easier to recruit employees from Tracy and the Central Valley, where many Bay Area residents are seeking more affordable housing.”

For comparison, office space in San Francisco runs around $74 per square foot. Silicon Valley’s office space is about $52 per square foot, but the Tri-Valley real estate runs about $32 per square foot. In Cambridge, Massachusetts, the average is $65.35 per square foot as of 2017, with laboratory space typically running higher than the office space. For example, in mid-Cambridge, office space averaged $59.69 per square foot, but laboratory space averaged $76.08 per square feet, according to Lincoln Property Company’s Cambridge Office & Lab Market Report, Second Quarter 2017.

Does this mean the hotspots of South San Francisco, Oyster Point and Kendall Square, Massachusetts are no longer the places to be? Probably not. But for the more budget conscious biotechs, the suburbs may be looking more attractive.