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

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

TRD NEW YORK /
Jan.January 12, 2017 11:00 AM

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.

“The concessions remains skewed to higher end of the market,” said Jonathan Miller TRData LogoTINY, 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.


Related Articles

arrow_forward_ios
John Giannone and Jac Credaroli (Credit: iStock)

Two Elliman agents launch platform to provide renters, buyers and sellers up to $50K in unsecured loans

Jacob Sudhoff and Scott Durkin (Credit: Sudhoff Companies, Emily Assiran, iStock)

Douglas Elliman is coming to Texas

Douglas Elliman chairman Howard Lorber (Credit: Getty Images and iStock)

Elliman’s revenue rose 18%, after sales frenzy to avoid New York’s new transfer tax

Cheyenne Lutek (Credit: Miami-Dade County Dept. of Corrections, iStock)

NY real estate agent arrested after removal from wine and food festival

The New York State Senate subpoenaed several top names in real estate

Elliman, RE/MAX, Keller Williams subpoenaed in discrimination probe

Localize.city president Steve Kalifowitz (Credit: iStock)

Rental listing prices jump on hundreds of apartments during broker fee ban: report

Compass' Rory Golod and Long Island’s North Shore (Credit: Long Island)

Compass sets sights on Long Island’s North Shore

Presidential elections affect the residential sales market significantly (Credit: Getty Images, The White House)

This is how presidential elections really affect home sales

arrow_forward_ios
Loading...