The Real Deal New York

The streak is over: Concessions in Brooklyn, NW Queens fail to hit record highs in May

In Brooklyn, about 43% percent of new leases had concessions, down from 51% in April
By Eddie Small | June 14, 2018 07:00AM

Tower 28 at 42-12 28th St (Credit: HillWest)

After months of breaking records, the number of new leases with concessions in Brooklyn and Queens finally saw a decline in May.

In Brooklyn, the share of new leases with concessions hit 42.8 percent, while in Northwest Queens, it hit 47.7 percent, according to the latest report from Douglas Elliman. These were both down from April, when 51 percent of new leases in Brooklyn and 65.1 percent of new leases in Northwest Queens included concessions, both record highs.

The slight decline may have to do with the increased demand for apartments that typically hits New York during the summer, although experts recently said that this was unlikely to be enough to put a major dent in the concessions market.

However, both numbers were still significantly higher than they had been in May 2017, when the percentages of new leases in Brooklyn and Northwest Queens with concessions were just 15.2 and 37.9 percent, respectively. The size of the concession in Brooklyn was the same year over year at 1.5 months, while in Northwest Queens it ticked up from 1.3 to 1.5 months.

The net effective median rent in Brooklyn dropped by 2.3 percent year over year to hit $2,718, the sixth consecutive month it fell. It also fell for the sixth consecutive month in Northwest Queens, dropping by 14.3 percent to hit $2,486. Rent per square foot in Brooklyn increased by 0.5 percent to $45.16, but in Northwest Queens, it fell by 6.5 percent to $47.62.

Listing inventory went in opposite directions in the two boroughs, dropping by 20.8 percent in Brooklyn to 1,972 and increasing by 1.5 percent in Northwest Queens to 525. Apartments in both boroughs were on the market for 28 days, down from 44 days in Brooklyn and 46 days in Northwest Queens.

Jonathan Miller, CEO of the appraisal firm Miller Samuel and author of the report, said that even though concessions were not at record highs anymore, they were still a huge part of the real estate landscape and not likely to go away anytime soon.

“On a year over year basis, concessions have been rising for 28 consecutive months beginning in February 2016,” he said, “so even though they’re not at a record level, it’s still part of a streak.”