The Real Deal New York

Concessions galore: Manhattan rental incentives just keep climbing

Median net effective rent dipped in December
By Meenal Vamburkar | January 10, 2019 08:00AM

(Credit: Douglas Elliman)

Manhattan’s rental market won’t be seeing a dip in concessions any time soon.

In December, the share of new rental transactions with incentives rose to 44 percent from 36.2 percent a year earlier, according to Douglas Elliman’s latest market report. That marked the 43rd straight year-over-year increase in concessions.

Put simply, “it’s a grind,” said Jonathan Miller, author of the report and CEO of appraisal firm Miller Samuel.

Median net effective rent slid 0.3 percent to $3,197. But prices were propped up by a product mix that includes a rise in higher quality rentals, Miller said. In the luxury segment, the median rental price was flat — while prices in the mid tier ticked down 1.3 percent. At the same time, the number of leases in the overall market fell 9.4 percent from the same period a year earlier.

In a separate report, Citi Habitats noted that the borough’s vacancy rate was at its highest point in nine months, climbing to 1.6 percent.

“The vacancy rate continued to climb, illustrating the ongoing disconnect between the rents that landlords want to achieve and the pricing tenants are willing to pay,” Citi Habitats president Gary Malin said in a statement. “Now more than ever, it pays to keep an open mind.”