The analysts at the investment firm Sandler O’Neil recently did a tour of the Manhattan apartment market with some of the biggest publicly-traded management companies including Avalon Bay and Equity Residential.
The news is that rents are off approximately 15%, much as in other parts of the country. The vancancy rate is up to 6%. In the past, Manhattan apartment buildings were almost always fully leased.
New tenants are demanding at least one month free rent. In some cases landlords are also paying the real estate agent’s fee—typically a month and a half’s rent. Tenants in New York used to get stuck paying that in the past.
The concessions are keeping traffic high, Sandler O’Neil says, as some chronic “deal shoppers” look for the best rent. The lower rents have also attracted some tenants from the Boroughs and New Jersey to move to Manhattan. Some tenants have traded down to smaller units or taken on a roommate to reduce their expenses.
Keep in mind we’re still talking about expensive apartments. A 1 bedroom that rented last year for $4,400 is only down to $3,700 now.