Pricey Manhattan Rents Reach Breaking Point
Digested from: Manhattan Renters Get Break After Two Years of Surging Costs
Bloomberg (3/7/16) Carmiel, Oshrat
Rents in Manhattan have dropped, a sign that tenants arent so willing to pay such high prices for premium space in the Big Apple anymore.
In March, appraiser Miller Samuel Inc. and brokerage firm Douglas Elliman Real Estate reported that monthly rents averaged $3,300, nearly 3 percent lower than they were a year ago. In contrast, vacancy rates reached a nine-year high of 2.42 percent, based on data from the two firms.
The metro areas job growth has contributed to rent increases since the Great Recession ended, yet prospective renters have recently pushed back on this trend, opting for less expensive but luxurious apartments in the citys boroughs, rather than pricier apartments in Manhattan.
Property owners in Manhattan have responded by offering lease agreements with more financial incentives. Such concessions, which might include a months free rent, have increased from 4.8 percent in 2015 to 14 percent in 2016 for all new rental contracts in the metro area.
Citi Habitats brokerage recently reported that more than 20 percent of the leases it handled in the first quarter of this year contained a move-in concession, an all-time high for incentives in the last five years.
As a general rule, lowering rents is a owners last resort, so incentives remain in play to help some Manhattan buildings compete with their new outer-borough rivals, Citi Habitats President Gary Malin observed in the report.