Manhattan’s rental market is stuck in a “slow grind”

Concessions continue as rents fall

Manhattan market report (Credit: Douglas Elliman)
Manhattan market report (Credit: Douglas Elliman)

Manhattan’s rental market is staying sluggish.

The median net effective rent, which accounts for concessions, was down 2 percent year-over-year to $3,310 in August, according to Douglas Elliman’s latest rental report. The luxury segment, in particular, saw a pronounced decline — with median rent sliding 3.8 percent.

“It’s a long, slow grind as opposed to something erratic,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and the author of the report.

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At the same time, the market share of concessions has expanded year-over-year for 39 consecutive months — rising to 34.7 percent. But those incentives are helping to keep the vacancy rate low. In August, the rate was 1.58 percent, down from 2.27 percent a year earlier. That’s the lowest rate in more than four years.

“The emphasis seems to be much more rooted in keeping the buildings full and getting tenants in there, than it is to simply protect base rents themselves,” Miller said.

In a separate report, Citi Habitats noted that the vacancy rate was lowest on the Upper West Side, at 1.06 percent — and highest in Midtown East, at 1.78 percent.

“Even small adjustments have a big impact in a price-sensitive marketplace,” Citi Habitats president Gary Malin said in a statement. “The owners’ goal was to attract new tenants before the end of summer busy season — and they struck while the iron was hot.”

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