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Renting appeals to many, drives up prices

Renting appeals to many, drives up prices

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From downtown to the Central West End to Clayton, paying more than $2,000 a month to rent an apartment is becoming more common.

The price tag doesn't stop there. Some rents top $3,000, $4,000 and even $6,000. A few are even higher.

"I've seen well in excess of $10,000 at the Plaza in Clayton," said Josh Corson, a broker at Upper End Properties.

Ten grand is rare in the St. Louis apartment market, but the area's appetite for four-figure rents is strong for several reasons, according to real estate experts:

• Wealthy home sellers, even those looking to downsize, are wary of buying a new home for fear its value will drop in the unstable for-sale market. Selling an existing home and renting for a couple of years can make sense.

• Out-of-town business executives in St. Louis for a year or so prefer to rent. Big corporate housing budgets pay for swank apartments that rival high-end condos in size and amenities.

• At the top of the top are professional athletes whose multimillion-dollar salaries give them the choice of the plushest apartments. An apartment gives them the flexibility to leave town quickly if they are traded to another team.

• Despite the demand, the supply is scarce. Banks and other lenders remain tight-fisted when it comes to almost any construction project.

Reis Inc., a national real estate research firm, said that in the first quarter, the "relentless pace of recovery" of the apartment market was unfazed by typical seasonal weakness or the snowy winter that might have prompted fewer households to move. Nationally, vacancies fell to 6.2 percent from 6.6 percent. It was largest first-quarter improvement since 2000, Reis said.

In St. Louis, the latest development to tap the high-end market is York House, scheduled to open in September at 4931 Lindell Boulevard. Completed in 1922 as the Chase Apartments, the building's $12 million renovation will provide just 33 apartments on eight floors.

Like other new higher-end residential projects, York House financing relies heavily on a HUD-backed loan. In addition to a HUD loan of $6.5 million, York House will get about $3 million in state and federal historic preservation tax credits.

KPLR-TV occupied the building's lower floors from when the station went on the air in 1959 to when it moved to Maryland Heights in 2002.

The building has been vacant about two years.

Chase Ullman built the structure and lived on the top floor, which developers Sam Koplar and Ted Gast are turning into a penthouse with a rooftop deck.

The "tea room's" stenciled ceiling and elaborate plaster crown molding of dragons and elephants will be restored.

The three-bedroom penthouse has wood paneling, oak flooring, a fireplace and a view of the Arch.

Koplar and Gast wouldn't disclose the rent of the penthouse, but a two-bedroom place on the same floor will go for $3,400 a month.

They hope York House will draw tenants from the growing BJC complex, its lively Central West End neighborhood and perhaps from the ranks of pro athletes.

"We're seeing incredible demand," Koplar said.

In 1993, ABC News converted a fourth-floor apartment into a temporary set for World News Tonight. Peter Jennings anchored the program there for a week as the network focused its coverage on Midwest floods that summer. ABC chose the site for KPLR's satellite link to broadcast the network show.

Gast jokes that York House will charge a higher rent for the "Peter Jennings suite."

Other new high-end apartment projects opening this year include Park Pacific and the Laurel, both downtown. Rent at Park Pacific, built in the 1920s as the Missouri Pacific Railroad headquarters, will hit $2,100 for corner apartments with two bedrooms and travertine-tiled baths.

Rents are expected to be comparable at the Laurel, in the former Dillard's building on Washington Avenue. That project includes apartments with balconies overlooking a landscaped interior atrium.

In Clayton, Corson is getting $6,000 in monthly rent for a 2,800-square-foot, three-bedroom, three-and-a-half bath unit he owns at the Crescent, a condo project where prices soared up to $1.5 million when it was under construction in 2008.

Several early investors planned from the start to use their condos for rental income, Corson said.

"And some are living there after they sold their houses and decided to rent for a while," he added.

The high-end rental market will stay strong as long as the for-sale market remains unstable, Corson said.

"I think it's only going to get stronger over the next year," he said. "Some people lost money selling their houses, and they're not prepared to make another investment."

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