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New York

Lease concessions hit record highs, as landlords scramble to fill apartments

More than 26% of Manhattan leases signed in December included tenant giveaways

Clockwise from left: 138 East 12th Street in Manhattan, 22 North 6th Street in Brooklyn and 61-55 Junction Boulevard in Queens
Clockwise from left: 138 East 12th Street in Manhattan, 22 North 6th Street in Brooklyn and 61-55 Junction Boulevard in Queens

The number of New York City leases signed with concessions jumped again last month, as landlords work to keep their properties rented.

In Manhattan during December, a record 26.4 percent of leases signed included some form of concession. In December of 2015, just 13.1 percent of leases included concessions. As a result, net effective rents remain stagnant across the borough. The median face (advertised) rent in December edged up 1 percent year-over-year to $3,388. However, net effective rent — which takes concessions into account — declined a slight 0.1 percent to $3,291, the fifth consecutive monthly decline.

As landlords become more willing to offer concessions, listing discount have risen. In December, they reached 3.7 percent, up .4 percent year-over-year.

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“The concessions remains skewed to higher end of the market,” said Jonathan Miller [TRDataCustom], the CEO of appraisal firm Miller Samuel and author of the report. The median rental price for a studio in Manhattan reached $2,575 last month, a year-over-year rise of 0.5 percent. For luxury properties, which is the top 10 percent of the market, the median rental price was $8,000, a fall of 6 percent.

In Brooklyn, the percentage of leases signed last month with concessions reached 13.7 percent, more than double what it was a year ago. Last month median rents fell for the fifth time since June 2016. Advertised rents in the borough slipped 3.8 percent to hit $2,700, while the median net effective rent dropped 4.4 percent to hit $2,662. The median rental price for a studio was $2,409, a year-over-year drop of 3.3 percent. In new development, the median rent was $2,993, a fall of 6.5 percent.

“The landlord is trying to protect the face [advertised] rent, they don’t want to telegraph that they are giving free rent,” Miller said, of the concessions.

In Queens, the median rent increased 11.7 percent from this time last year to reach $2,850. More new development units are becoming available, and the number of new leases surged 167 percent to reach 348. While he does not yet release figures on Queens landlord concessions, Miller believes they are occurring at a similar rate to Manhattan.

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Douglas EllimanJonathan MillerRental Market