Concessions are Brooklyn’s “worst-kept secret” apparently.
In order to fill high-end luxury rental units about 48 percent of developers — as of February — are cutting deals with tenants to stave off the competition to the point where tenants receive free rent for an average of 1.4 months, according to the New York Times. The number of concessions offered at the same time last year was around 16 percent.
A report prepared by Douglas Elliman appraiser Jonathan Miller found that concessions were most common — as in offered 80 percent of the time — in Brooklyn’s most expensive neighborhoods: Dumbo, Downtown and Fort Greene.
“Developers want to maintain their listing prices, and then futz with the numbers behind the scenes,” CORE broker Paul Johansen told the Times. “A couple years ago, there were no concessions whatsoever.”
But developers aren’t wringing their hands in despair; they’re too busy building with more than 6,000 new units are slated to hit the market this year with close to 10,000 in the pipeline for 2019.
Real estate consultant Nancy Packes notes demand, population growth and the job market is strong; she expects the oversupply of units — and their plush concessions — to disappear by next year or 2020. She says those fixated on the deals tenants can currently get in BK are missing the point.
“They’re looking at the trees, not the forest,” Packes told the Times.
Rentals make up 75 percent of Brooklyn’s residential market. [NYT] — Erin Hudson