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A Hamptons Spa Has Become a $400,000-per-Month Rental Property

A Hamptons Spa Has Become a $400,000-per-Month Rental Property

(Bloomberg) -- Shou Sugi Ban House, a 13-room spa and resort in the Hamptons on New York’s Long Island, had been open only a year when its owner Amy Cherry-Abitbol shut it down in March. “In the winter, we have a shorter schedule—it was Thursday through Sunday—but we were pretty much sold-out, which was shocking to me,” Cherry-Abitbol says. “And then, of course, the cancelations started trickling in, and then there was a flood of them.” 

Today, the spa remains closed, even though a few rooms are provisionally booked for Memorial Day weekend. “We don’t have many [bookings] at all for later in the summer,” she continues, “because pretty much everything we had has been put on hold.” 

Without guests, Cherry-Abitbol’s attention has turned to her full-time employees. She realized that “the safest option for both the staff and guests would be to have one consistent renter, whether it’s an extended family or a small organization,” she says, “so the guest turnover would be lower, and we’d be dealing with the same people for an extended period of time.”

Her solution is to offer the hotel as a buyout: She’s putting the property up for rent from Memorial Day to Labor Day for a total of $1.25 million, with John Vitello of Brown Harris Stevens handling the listing. “My main motivation is to keep the team intact,” Cherry-Abitbol says.

The Market

A Hamptons Spa Has Become a $400,000-per-Month Rental Property
A Hamptons Spa Has Become a $400,000-per-Month Rental Property

The Hamptons rental market is booming, brokers say, fueled by New Yorkers eager to leave the city during the shutdown.

Still, the roughly $410,000 a month that Cherry-Abitbol is asking for her three-acre property is priced at the very top of the Hamptons rental market. “There aren’t 100 houses in the Hamptons that cost $400,000 a month to rent,” says East Hampton Corcoran broker Gary DePersia. “But there could be 25 or 30.”

That monthly amount, he continues, is often only for the high season in August. “If you have an $800,000 rental for the season, August could be $400,000, and June and July could be another $400,000, combined.”

Many of the houses in that price range are located at the beach and include swimming pools, sprawling lawns, and some combination of tennis courts and other diversions for summer sports. “Oceanfront properties don’t even have to be beautiful to get that amount,” DePersia says. “But off-the-water houses have to be really nice.”

A Hamptons Spa Has Become a $400,000-per-Month Rental Property

Cherry-Abitbol’s resort is just north of the Montauk Highway, adjacent to the Parrish Art Museum.

While it does have a tennis court and multiple pools, “it’s not your typical residential site,” Cherry-Abitbol says. But she argues that “in the current circumstances, it’s ideal: The suites don’t have any hallways or elevators; they all have private entrances that can be accessed from the outside, so if people are interested in some kind of social distancing—even from their own family—it’s perfect.”

A Hamptons Spa Has Become a $400,000-per-Month Rental Property
A Hamptons Spa Has Become a $400,000-per-Month Rental Property

What You Get for Your Money

The property is nearly brand-new and has a sleek, high-design aesthetic. Seven suites have king beds; six have queens. Each has a garden patio, a gas fireplace, and a soaking tub.

Common areas include a main 5,800-square-foot “barn” with a screening room, lounge, library, chef’s kitchen, and modernist dining area.

A Hamptons Spa Has Become a $400,000-per-Month Rental Property

There’s a spa with hydrotherapy plunge pools, a sauna, ice fountain, and a solarium roof deck. The property also comes with the use of three Teslas and a Chris Craft picnic boat.

The $1.25 million pays for a skeleton crew to maintain the grounds, but the housekeepers, cooks, sous-chefs, waiters, and other staff members would cost additionally. (This is a common practice in the Hamptons, where renters often must pay for heat, electricity, and cable TV on top of the agreed-upon price.) The culinary team of four, led by the consulting chef Mads Refslund, is standing by to create a menu for whomever rents out the property, Cherry-Abitbol says.

A Hamptons Spa Has Become a $400,000-per-Month Rental Property

She estimates that staff costs would come to about $100,000 additionally per month. “We just want them to stay at their prior compensation level,” she says. “It’s not something we would be profiting from.” 

Prospective Renters

Cherry-Abitbol says her target renter is either an extended family looking for a compound-like setting or a “small company or other organization that’s particularly interested in its security.”

A Hamptons Spa Has Become a $400,000-per-Month Rental Property
A Hamptons Spa Has Become a $400,000-per-Month Rental Property

With staff located in a separate building on-site, “they’d have round-the-clock security, and it’s a gated property, so it’s for someone who wants all that but doesn’t want to feel closed-in in a typical-sized residence.”

The $1.25 million might sound steep, she says, “but the reaction that I’ve received so far is that it’s not overpriced.” Given that there are no comparable properties for rent, Cherry-Abitbol continues, “it was obviously hard to price.” The final amount is “based in large part on our costs for running the facility.”

Still, she acknowledges, “I do understand that there’s going to be a small population that’s able to [rent it].” Which means, as with all things, “it’s negotiable.”

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