Manhattan rental concessions keep growing — especially in new dev

The vacancy rate is rising too

TRD New York /
Dec.December 13, 2018 08:00 AM

(Credit: iStock and Douglas Elliman)

Manhattan’s median rents took a hit as the market share of leases with concessions continued its rising streak. And the state of the market — rampant with incentives and listing discounts — is unlikely to change anytime soon.

“I don’t see how you could say otherwise,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of Douglas Elliman’s rental report. “It’s more of the same.”

Median net effective rent fell 1.9 percent year over year to $3,221. At the same time, the share of new leases with concessions swelled to 42.2 percent from 29.6 percent a year earlier. November marked the 42nd consecutive month of year-over-year increases in incentives.

Concessions have been even more prevalent in new development. The share of 67.4 percent indicates the market is absorbing the higher-end inventory more slowly, Miller said. Because the price points of new development projects skew toward the higher end, “the product being built doesn’t quite match the demand.”

In a separate report, Citi Habitats noted that the vacancy rate, which was 1.55 percent in November, increased for the third straight month. The market had the most available inventory in the month since March. Gary Malin, the brokerage’s president, pointed to the issue of affordability. While rents have declined, prices remain high relative to most tenants’ ability to pay, he said.

“People are pressed financially in so many different ways,” he said. “ It’s really difficult to push rents above where they are now.”


Related Articles

arrow_forward_ios
Clockwise from top left: John Gomes, Ronita Kalra, Eric Beniam and McKenzie Ryan (Credit: Getty Images, iStock, Wikipedia)

“We’re putting ourselves in situations where anything is possible”: Real estate agent’s killing rattles industry

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

157 West 57th Street (Credit: iStock)

One57 condo with reduced ask tops a slow week of luxury contracts

Clockwise from top left: 730 Fifth Avenue, Unit #PH21; 730 Fifth Avenue, Unit #18A; The Pierre, Unit #3101; and The Park Imperial, Unit #64

Priciest homes listed last week include $60M pad at Crown Building

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

56 Leonard Street (Credit: iStock)

He invested more than $130M into 4 Manhattan condos. Now he’s taking a hit

Due to relatively high income levels and low transportation costs, New York City is the eight most affordable of 20 major cities (Credit: iStock)

NYC is the 8th most affordable big city in America*

arrow_forward_ios
Loading...