Concessions hit record highs once again in Brooklyn and Queens
Amount of deals with concessions topped 50% in one borough
The rental markets in Brooklyn and Queens kicked off 2018 by once again setting new records for the amount of deals that include concessions, according to a report from Douglas Elliman.
In Brooklyn, the amount of new rental transactions with concessions or where the owner paid the broker commission was at 47.5 percent for January, a massive increase from 18.1 percent a year ago, while in Queens, it hit 50.8 percent, up from 38.5 percent last year.
The length of free rent concessions ticked down slightly in Brooklyn, dropping from 1.6 months to 1.5 months year-over-year, but it shot up in Queens, increasing from 1.1 to 1.8 months.
The practice is now widespread across both outer boroughs, according to Jonathan Miller, CEO of the appraisal firm Miller Samuel and author of the report.
“Not only are we seeing concessions at the high end, but we’re also seeing concessions across the market,” he said. “It’s not just high-end new developments.”
Brooklyn and Queens also both saw surges of new leases in January thanks to new developments entering the market and tenants pushing back against their landlords, opting to look for new places instead of renewing their existing leases. In Brooklyn, the number of new leases increased by 42.1 percent to 1,090, and in Queens, the number went up by 43.2 percent to 305.
Both boroughs also saw a decline in the amount of time units spend on the market, dropping from 68 to 35 days in Brooklyn year-over-year and from 42 to 31 days in Queens.
Brooklyn’s median rent did not change compared to last year, holding steady at $2,750, but once concessions were factored in, it dropped by 2.4 percent to $2,636.
In Queens, rent dropped in both instances. Without concessions, it fell 1.9 percent to $2,650, and once concessions were included, it dropped by 4.7 percent to $2,507. This was the borough’s fifth year-over-year decline in net effective rent in six months.
“This market is really characterized by elevated inventory coming into the market and then how the landlords are grappling with that,” Miller said.