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September 18, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Gary Hirsch finds luxury rental market offers housing alternative

Gary Hirsch found a real estate niche 20 years ago and has been successfully serving that segment of the market in both Westchester and Fairfield counties. Photo by Peter Katz

Although real estate developer and marketer Gary Hirsch, whose office is in Rye, is confident he could build 60-story apartment buildings if he wanted to, “It’s not what we choose to do,” he told the Business Journal. Nevertheless, Hirsch, who found a real estate niche 20 years ago and has been successfully serving that segment of the market in both Westchester and Fairfield counties, has been carefully branching out.

“My wife, Diane, and I decided to start a business that had no real presence in the Westchester market or frankly throughout the country, which was to acquire and renovate and rent single-family homes for short-term rentals for as little as 30 days,” Hirsch said. “We would buy a house in prime communities like Scarsdale and Rye. We would renovate it, furnish it and advertise it.”

Far from being flippers who’d buy, renovate and sell, they targeted people who needed a place to live during their own house renovation, a place to live while waiting to close on their own house purchase and families of corporate executives, many with two or three children, who had relocated to Westchester and needed a short-term rental.

Diane Hirsch served as president of Elk Homes LLC from the beginning and a few years ago added the title of president of a related company, Elk Homes Realty LLC. Gary Hirsch holds the title of chairman.

“Basically, between 2000 and 2007 or 2008, we focused entirely on the short-term rental business,” he said. “Then, we came to understand that there really was a shortage of quality rental housing for those people who were looking for longer-term rental options.”

Hirsch said it was in 2011, after the market had stabilized from the bursting of the housing bubble, “but had not yet recovered, my partner Jim Lash and I along with my wife, Diane, decided it was an opportune time to significantly expand our portfolio and go into long-term housing.”
Lash provided expertise about the other side of the New York-Connecticut border, having served as Greenwich’s first selectman from 2003 through 2007.

“Most landlords of single-family homes in Greenwich and in prime Westchester communities are what we call ‘accidental landlords,’ ” Hirsch said. They moved and had a house they didn’t want to sell so they offered it for rent. “They really weren’t in the business of bringing in clients and taking care of them, of maintaining the home and offering long-term rental options for multiple years.”

Elk Homes’ portfolio of luxury rental houses consists of 39 properties in Westchester and 14 in Connecticut. Examples include a 5,600-square-foot, six-bedroom house with five full baths on Palmer Terrace in Riverside, Connecticut; a 5,500-square-foot, seven-bedroom, five-bathroom house on Dandy Lane in Cos Cob, Connecticut; and a 7,024-square-foot, seven-bedroom, six-bathroom house on Fox Meadow Lane in Scarsdale. There are numerous smaller houses, such as one with 2,464 square feet on Iselin Terrace in Larchmont, which has four bedrooms and two full baths.

“The tenants in our single-family homes are probably 70 percent, 80 percent relocating executives who are going to be here between two and four years,” Hirsch said. “It doesn’t matter how nice you are. They’re going to leave at the end of their contract or their arrangements with their employers. And they come from all over the world.” Hirsch begins seeking new tenants between 60 and 90 days before lease expiration.

With its success in the house rental field, Elk Homes tested the market for apartments with a strategy of constructing small infill buildings in Irvington, Mamaroneck and Rye. Elk’s Harbor Court at 108 Mamaroneck Ave. in Mamaroneck has six units while Marina Court at 422 Boston Post Road, also in Mamaroneck, has 13 units. It has under construction Colonial Court, a 16-unit luxury building at 8 Boulevard West in Pelham.

“Generally, the apartment sizes range up to 2,500 square feet,” Hirsch said. “They all come with very high-end appliances and high-end finishes, tall ceilings, beautiful windows and also great locations. They’re right near the train station, the shopping district, the movie theater.”

Hirsch plans to have a model apartment ready for showing at the Pelham project in May and expects the building to be opened during the summer. “Even though it’s a small building, we’ll have a full fitness center. We’ll have a rooftop amenity that will have a view of the New York City skyline. We’ll have a pet spa. We’ll have bike racks, electric car chargers,” he said.

Elk Homes’ rents range from about $4,000 a month for an apartment up to about $20,000 a month for a large house.

Hirsch discussed the fact that up to 25 percent of the energy consumed in a house typically goes to heating hot water. “In all of our houses for the last few years, and in our apartments, we’ve gone to tankless water heaters, which is an on-demand system. It’s a significant incremental cost to do that,” he said.

Elk’s properties use higher R-value insulation to reduce overall energy demand, energy-efficient windows and appliances and, in the newer buildings, green roofs to capture storm water.

Elk Homes plans to confine its operations to Westchester and Fairfield. Hirsch said, “Do we want to go across the river to New Jersey? Do we want to cross the bridge and go to Long Island? There are many great communities where we could bring the level of service and quality that we have and, I think, do well. We’re going to probably continue to stay focused on our prime markets where we have the greatest knowledge and experience.”