Manhattan renters trading up drive big gain in new leasing

[NEW YORK] Manhattan apartment dwellers on the hunt for better digs drove a surge in leasing last month.

New lease signings in the city's costliest borough jumped 112 per cent in February from the same month last year, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate said in a report on Thursday. That's the biggest monthly gain since April 2011.

Renters seeking to capitalise on record concessions and falling prices were the catalyst, and leasing gains were especially strong for higher-end units. Doorman buildings attracted new renters at more than twice the rate than at those without the amenity, according to the report. For apartments priced in the top 10 per cent of the market, signings jumped 114 per cent in February.

"It reaffirms the strength in the higher-end market," Jonathan Miller, president of Miller Samuel, said in an interview.

The increases came even as prices for luxury units declined at a slower pace than other types of apartments and landlords handed out fewer freebies in that segment.

Overall, landlords facing a glut of empty apartments offered some of the biggest move-in concessions on record. In February, the value of incentives on new leases averaged 2.1 months of free rent and roughly 41 per cent of leases came with concessions, according to the report. Manhattan's listing inventory rose 154 per cent in February to 11,750 units.

Still, there's uncertainty about whether the rental market can rebound given the virus variants looming and the slow pace of vaccinations in New York City. But the partial return of indoor dining and the slowing infection rate may buoy optimism among renters.

"People aren't going to return to Manhattan until they feel safe," Mr Miller said. "We're seeing that gradually becoming less of a concern."

Manhattan's average rent of US$3,791 fell about 14 per cent from February 2020. The average for the top 10 per cent of the market was US$10,209, down 13 per cent. Those prices do not include concessions.

New lease signings increased outside Manhattan. In Brooklyn, apartment seekers signed 1,834 leases in February, a 133 per cent gain from a year earlier. In Northwest Queens, the increase was 73 per cent for a total of 386 leases.

BLOOMBERG