Manhattan Rents Jump Most Since 2015 as Landlords Try Their Luck
Manhattan Rents Jump Most Since 2015 as Landlords Try Their Luck
(Bloomberg) --
Times have changed at the Upper East Side building where broker Cyla Klein has found homes for many renters. Last year, the property’s landlord, eager to lure tenants in a slow market, gave away a month’s rent and installed window air conditioners for free.
“It’s totally different now,” said Klein, an agent at Citi Habitats. When she brokered a lease for a studio apartment there last month, the owner offered no perks, and demanded $125 to install the cooling unit.
A moribund sales market has sent demand for rentals in Manhattan surging, reversing the fortunes of landlords who spent last summer fretting over how to fill empty units amid so much new apartment supply. For most of this year, owners have been giving fewer freebies and testing the waters with higher asking rents. And last month, their experiment paid off big: They got the largest year-over-year increase in almost four years.
The median rent in Manhattan, after concessions are subtracted, was $3,521 in July, a 6.5% jump from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Rents haven’t climbed that much since August 2015, when they rose 6.6%.
“Owners have had a better success rate at getting what they want now than they did a year ago,” said Gary Malin, president of Citi Habitats, which also released a report on the rental market.
Citi Habitats said the average rent in Manhattan reached $4,160 last month -- the highest for any month in records going back to 2007. The figure doesn’t factor in concessions, such a month’s free rent or payment of broker’s fees. Such perks were offered in 31% of all new leases in July, down from 35% a year earlier, Miller Samuel and Douglas Elliman said.
When Linda Ball started her apartment search, she found there was little time to deliberate after seeing something she liked, and there was certainly no negotiation. But the teacher, who sought to relocate from Greenwich, Connecticut, after retiring in June, had her heart set on a city lifestyle.
Working with Klein of Citi Habitats, Ball set a budget of $2,500 for an apartment on the Upper East Side, with a minimum of 550 square feet and, with luck, a dishwasher. Together they viewed about 20 units -- and missed out on two suitable ones because other would-be tenants put in their applications first.
“Gone, gone, gone -- everything just flew off the market,” Ball said.
Then one Friday night, a listing for a studio at 1700 York Ave. popped up, and Klein raced to tell her client about it. They saw it that Saturday and applied for it first thing Monday morning, just ahead of a few others who were also interested. The $2,475-a-month apartment had no dishwasher, and air-conditioning units would have to be installed by management -- for a fee.
The median asking rent on the Upper East Side jumped 9.2% from last July to $3,680, Citi Habitats reported.
“Landlords are becoming much tighter now,” Klein said. “They’re saying, ‘This is what I want.’”
--With assistance from Sydney Price.
To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net
To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Christine Maurus, Rob Urban
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