Rental report wars: Which one is most accurate?

<i>As more firms track residential leases in Manhattan, whom to believe?</i>

The rental market in New York is not exactly known as a bastion of transparency: To fill the information void, several competing rental market reports have recently emerged and are going head-to-head. However, in a puzzle for the industry, the reports sometimes feature wildly divergent information.

Ubiquitous appraisal firm Miller Samuel launched its first-ever rental report a few months ago; rental brokerage giant Citi Habitats, long a provider of rental statistics, released a new “peak season” rental report in September; and newly merged TDG/TREGNY is continuing to publish its frequently cited Manhattan monthly report, which it has been doing since 2007.

But while it may seem that a sudden increase in rental information would help paint a clearer picture of New York’s long-mysterious rental market, there have been significant differences in some key numbers.

The Miller Samuel report, which is prepared on behalf of Prudential Douglas Elliman, found that in the third quarter, there were 2,346 rental transactions, a 58.9 percent decrease from the same period in 2008. The Citi Habitats third-quarter report, however, cites a total of more than 3,800 rentals — an 11 percent increase from the same time in 2008.

Why the differing numbers?

In addition to the fact that rental stats are notoriously difficult to compile (because unlike sales information, residential leases are not publicly recorded), each firm is taking a distinct approach to its research.

The authors of the reports, meanwhile, are not shy about positioning themselves to win the war over who has the best data and is therefore the authority on the market.

While the raw numbers in the Miller Samuel report are smaller, the president of the firm, Jonathan Miller, said it is a marketwide analysis that tracks trends, and is a better gauge of what’s happening in the overall market than a report that just looks at one firm’s deals.

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Meanwhile, Gary Malin, president of Citi Habitats, said his report, which includes only his firm’s closed deals, provides the most incisive information because of the sheer volume of rentals that Citi Habitats handles.

“Other firms are not painting an accurate picture of the marketplace,” Malin said. “We’re now doing over 10,000 deals a year, and we’re the largest rental firm in the city.
Given the volume of business we do in every neighborhood in Manhattan, we’re able to have accurate information.”

Daniel Baum, CEO of TDG/TREGNY, whose monthly reports combine information from the firm’s own database and others to track fluctuations in activity, said that tracking closed transactions, like Citi Habitats does, “is a useful source of information in and of itself.” However, he said, because that information is only coming from one firm’s data, it is “limited in scope as far as the actual market as a whole.”

Baum said his report is “trying to get the overall trend of the market.”

Miller echoed the usefulness of that goal: “What [Citi Habitats is] doing is reflecting their own business, and that’s not necessarily the market; it’s who their clients are.”

He added, “Anytime anyone in any profession releases a study that’s only their own activity, you risk skew, because the results are determined by who your client base is — whether it’s rentals or soft-drink sales.”

Some of the data that Miller included in his report, such as square footage and days on the market, has not been included in the other rental reports.

Miller said those stats and the concessions landlords are offering (but which aren’t captured in any of the rental reports) also have an influence on the market.

While the reports may — at least for the time being — have differing information, there is probably one thing all of the authors can agree on: “Everyone is in the same situation,” Miller noted. “We’re not getting the entire window of activity.”