New York City rents notch third straight record

As Manhattan market tightened, tenants locked in longer leases

(Illustration by The Real Deal with Getty)

As fears around the spring bank collapses eased, tenants scrambled to sign new leases, driving Manhattan rents to yet another record.

But a closer look at leasing patterns reveals many city renters still fear inflation and a recession.

Manhattan’s median rent notched a new high for the third straight month in May, hitting $4,395, according to a report by the appraiser Jonathan Miller for Douglas Elliman.

Leases with concessions also bested last month’s record, with the median reaching $4,360.

Brooklyn and Northwest Queens saw their median rent jump to the highest and second highest on record, respectively, at $3,550 and $3,402.

Those jumps came as tenants inked a staggering number of new leases.

In April, the banking crisis had stayed the pens of Manhattan renters, dragging new signings down 20 percent from March, but May erased that decline as leasing surged 30 percent.

“New leasings rebounded sharply in May due to the idea that the banking crisis seems to have passed — whether it actually has or not,” appraiser and report author Jonathan Miller said.

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Renters still hedged against inflation, which has been stubborn.

The rent for non-doorman buildings jumped 9.1 percent year-over-year, overtaking the 4.3 percent gains seen at doorman buildings, which typically lease at a higher price point. 

The differential signals that renters continue to turn to more affordable units as inflationary pressures persist.

The consumer price index ticked down to 4.9 percent in April, a far cry from last year’s high of 9.1 percent in June. Still, inflation remains above the Federal Reserve’s target rate of 2 percent, creating an expectation of interest rate hikes that cool the economy.

Even luxury leaseholders attempted to insulate themselves from inflation and the threat that a late-year recession could spur layoffs.

Luxury listing inventory fell year-over-year for the first time since last summer. And luxury tenants extended lease terms by the longest stretch since the beginning of 2022.

“Inflation continues to be a challenge and people are locking in even at the high end because the general view is that rents may continue to rise,” Miller said.

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