Amid a glut in available rental properties, Equity Residential reported a decrease in rental income in New York City — the public company’s only market with a reported decline in the fourth quarter.
Equity, one of the largest apartment owners in the U.S., reported an average 0.3 percent decrease in rent in New York, Bloomberg reported. None of the real estate investment trust’s other markets — including Boston, Washington D.C., Seattle, Los Angeles and San Francisco — saw a decline.
“New York was our worst-performing market,” David Neithercut, the firm’s chief executive officer, said on a conference call on Wednesday. “We still expect New York to be our worst-performing market.”
The overall decline shouldn’t come as too great a surprise; about a year ago Equity said it expected declines at its New York City holdings, and budgeted $4 million in funds dedicated to concessions, which pushed down profits.
Roughly 19,000 new apartments are expected to hit the New York market this year, 62 percent of which will be in Brooklyn and Long Island City. In October, Equity executives indicated that their Manhattan-centric portfolio hadn’t seen much of an impact from competition in Queens.
But on Tuesday, David Santee, the company’s COO, said prices in Manhattan could be driven down by landlords offering discounts in Long Island City and Brooklyn. [Bloomberg] — Kathryn Brenzel