Manhattan’s Rental Market Is All About Concessions And More Concessions
Manhattan’s rental market is all about concessions and more concessions. “In markets that are more favorable for renters (more available units than demand to fill these units), landlords may offer concessions to entice renters to pick their property,” explains Senior Managing Editor of Apartment Guide Brian Carberry.
The pandemic combined with historically low-interest rates and work from home mandates fueled the path to homeownership for Millennials exiting the city. A perfect storm was created as renters became buyers choosing the suburbs of New York, New Jersey, and Connecticut. According to data from StreetEasy median rent prices in Manhattan have fallen below $3,000 per month (they’re now $2,990) for the first time since 2011.
Despite significant rent decreases the over-supply of available units make this a renter’s market. Currently even these lower prices aren’t luring an abundance of renters to sign leases. Here’s what some landlords are doing to attract those elusive tenants who for now can easily make a deal.
“Some of the most common concessions include a month of free rent, which is likely prorated and offered as a discount each month, access to luxury amenities at a reduced or no charge, reduced security deposits, longer or shorter lease terms, free parking or upgraded features,” Carberry notes.
No fees: It’s hard enough to attract renters — apartments with attached broker fees only act as a further barrier to getting a lease signed.
Free-rent: A month or two of free rent was typical for many Manhattan apartments before the pandemic. Now, it’s essential.
Wiggle room: Even with rent prices low, tenants are still looking to secure a deal and negotiate. Landlords who are unwilling to do so may see an interested tenant slip away to a competitor.
In-unit amenities: With an emphasis on social distancing, in-unit amenities — such as washers and dryers — are going to attract the most attention. If a unit (or a building) doesn’t have laundry facilities, it may be a tough sell, as people are likely concerned about using a laundromat due to COVID.
June Gottlieb a top broker at Warburg Realty has real-time negotiation experience. “In today’s market, that has almost triple the number of rental listings that we would normally see, landlords must pay the broker fee. We won’t take a listing unless we can say “no fee.” Also, landlords should be prepared to hear offers from tenants who ask for anywhere from 1-3 months of free rent as part of their offer,” Gottlieb notes.
“In one of our most recent deals, tenants also requested that the landlord install privacy shades and customize closets. We negotiated a credit for the closets, and the tenant agreed to take on the project of custom-fitting the master bedroom’s closet, but the landlord retained pre-approval of design and materials before the tenant proceeded with the project. We did not agree to order and install shades, but we did agree to not require the tenant to remove what they installed prior to vacating at the end of the lease,” Gottlieb adds.
Edgar Romero owner of a luxury condo at 100 Barclay Street in Tribeca understands the current climate. “In these difficult times, flexibility on both sides of the rental market is necessary.” Romero’s unit will soon be on the rental market listed by agent Karen Kostiw of Warburg Realty.
“Concessions must be made to keep the market moving on some level with the exodus we have seen from the city, I have confidence that New York will again shine as the epicenter of the world and demand will again be there in a couple of years. Patience and flexibility must be the focus now, in real estate as well with the pandemic,” Romero concludes.
For an in-depth look at rental markets around the country check out Apartment Guide’s latest 2020 Rent Report. Carberry offers a take-away. “It never hurts as a renter to ask or negotiate for some of these concessions, the worst that can happen is the landlord will say no.”