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Manhattan landlords race to fill apartments in declining market
[NEW YORK] Apartment rents are dropping in Manhattan. So is the patience of landlords.
Units that found tenants in February spent an average of just 34 days on the market - the shortest stretch since October 2011 - as owners cut rents, offered incentives and did whatever else they could to fill vacancies, according to a report Thursday by appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate.
"Landlords, they're not playing around," Jonathan Miller, president of Miller Samuel, said in an interview. "They're being more aggressive in terms of time. They just want to get them in." Rents fell from a year earlier for the third consecutive month in February as landlords competed for tenants in a market that's overflowing with choices. Owners cut an average of 2.4 per cent off their asking prices, then sweetened deals with incentives, such as rent-free months, on 48 per cent of new leases, Miller Samuel and Elliman said. The median rent, with concessions subtracted, dropped 2.8 per cent from a year earlier to $3,168.
Concessions are getting more creative. Publicly traded landlord Equity Residential is reducing security deposits to US$1,000, instead of the usual full month's rent, for tenants who sign leases at most of its Manhattan towers by the end of March. Signers at Stuyvesant Town-Peter Cooper Village, the borough's biggest apartment complex, will get a year of free Wi-Fi and cable.
At one Upper East Side property, a letter from owner Hakim Organization was slipped under residents' doors, offering half a month of free rent if they help find occupants for vacant units by April 1.
"If you have a friend or relative looking for an apartment, we are willing to rent to them through you," read the letter, signed by Ely Samuels. He didn't return calls seeking comment.
Landlords seeking the advice of brokerage Citi Habitats have been calling regularly to ask "What else can I do?" said Gary Malin, the firm's president, who tells them that ingenuity helps. That's translated into some owners lifting restrictions on pets and others offering to pay a portion of a new tenant's moving costs, he said.
"A lot of owners take the wait-and-see approach, but unfortunately, the market has changed and the sentiment of tenants has changed," Mr Malin said. "Landlords realized that what they were doing wasn't getting the right results." About 5,630 newly built apartments will be listed for rent in Manhattan this year, according to data compiled by Citi Habitats. That's on top of the 4,270 units that reached the market in 2017.