Manhattan New Apartment Leases Plunge as Landlords Keep Tenants
(Bloomberg) -- At the height of leasing season, New York apartment renters are staying put.
The number of new leases in Manhattan fell 17.5 percent from a year earlier in June, according to a report released Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The decline -- to 5,447 deals, not including renewals -- is the biggest year-over-year drop for the month since 2009.
A decrease in new leases often means landlords are finding ways to retain tenants, said Jonathan Miller, president of Miller Samuel. They’re competing with new apartment buildings, where renters are often offered a free month’s rent or comped broker fees. Those kinds of concessions have reached record levels in recent years, and haven’t gone away. In June, 32.6 percent of new leases included some sort of sweetener.
“Landlords are being much more flexible and aggressive with their current tenants, knowing that these tenants are concession-hopping,” said Hal Gavzie, executive director of leasing for Douglas Elliman. The focus for landlords has become keeping their buildings full. “There is just so much product out there.”
The median net effective rent in Manhattan, which includes landlord concessions, fell 2.8 percent in June from a year earlier to $3,314, according to the report.
The story was similar in Brooklyn, where new leases dropped 17.7 percent from a year earlier in June, and in northwest Queens, where they decreased 13.7 percent. Net effective rents declined in both boroughs as well.
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