New York City Luxury Rental Blog Archives for February 2012

Subway Construction Along Second Avenue Lowers Rents on the Upper East Side

The constuction on the Second Avenue Subway is lowering nearby rentsFor those looking to find a starter apartment in Manhattan, look no further than the Upper East Side. That’s right, the Upper East Side. The neighborhood with a long held reputation for having the single greatest concentration of wealth in the world is now home to some of the best rental deals in Manhattan. There is a catch though. Rental apartments on the Upper East Side are affordable for a reason: They all reside above the subway construction sites along Second Avenue. If you don’t mind living above a construction site, these low rents represent a great opportunity to live in one of Manhattan’s best residential neighborhoods. And since the Second Avenue Subway Line isn’t due to complete its first phase until December 2016, chances are that the rents will stay low for at least the next 4 years.

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January Market Report: Slow, But Not Too Slow

Studio apartment in ManhattanThe MNS rental market report for the month of January is out, and much like in December, it shows a market that has conformed to expectations and dipped, but that is still much stronger than it was a year ago. Generally, the cold winter months keep market activity to a minimum, but average rent for all luxury Manhattan rentals dropped only 0.4% from December to January. Prices in December were down 1% from where they were in November, suggesting that, while the market has sagged a bit, it is by no means as low as it was last year, or as low as industry professionals were expecting. In fact, rent rates are up an average 7.2% from where they were in January 2011. If you’re looking for another sign that the Manhattan rental market has improved substantially, here it is.

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The Island of Manhattan Still Has Room to Grow

Manhattan may be an island, but apartment inventory is unlimitedIt’s an old story at this point, but if you’ve been following the Manhattan rental apartment market at all, you know the drill: vacancy is down, rents are up, new construction is scarce, and concessions are rare. Among the many explanations as to how we got here - and there are plenty - one of the most prominent is that Manhattan is a small island where space is limited, hence the lack of inventory. The reality is that this real estate platitude is a lazy way of analyzing our current market, one which obscures far more accurate explanations. For instance, the tight credit market for large new construction projects, government restrictions such as historic districts, and long-standing preconceived notions about certain Manhattan neighborhoods have a far greater influence on Manhattan’s rental apartment inventory than the size of the island.

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A Look at Some of Manhattan's Priciest Apartments

Let’s start this post off Interior of 144 Duane Street PHwith some basic economic theory. As we’ve written before, inventory on Manhattan apartments for rent is at an all-time low. Landlords are receiving multiple applications for their apartments, and waiting lists have gotten as backed up as having twelve people on them. With demand skyrocketing and supply scarce, basic market laws tell us one thing: prices for apartments are going to be high.

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Manhattan Rents Will Keep Rising in 2012 and Beyond

Luxury Rentals in Manhattan are likely to keep getting more expensiveThe luxury rental market boom in Manhattan is just getting started. A dearth of new construction for Manhattan apartment buildings, severe lack of inventory, and high demand for luxury rentals in Manhattan virtually assures that prices will not only stay high or get higher on the top end of the market, they will likely rise for the lower end as well. Rents are soaring right now all around the borough, especially south of 59th Street. Desirable Manhattan neighborhoods like the West Village and Chelsea are setting records for high rents, but rents for formerly inexpensive apartments in Midtown West and the Financial District are also reaching new heights. Studios in Chelsea average $2,332 a month, while one-bedrooms in the West Village average $3,278 a month. Furthermore, newer buildings like 8 Spruce Street have raised the bar for luxury rentals in Manhattan. 8 Spruce in particular has changed the perception that renting is somehow less respectable than buying by offering luxury apartments that match the quality of condos. All over the city, landlords are responding by renovating their rental apartments to meet these new standards, so even though you may pay more for rent than you’d like to, you’ll get more in return.

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Wall Street's Woes Don't Slow Down Manhattan Rentals

Wall Street has always influenced apartment rentals in ManhattanWall Street has been front page news ever since Lehman Brothers went under back in 2008, and the adverse times that followed for the financial sector have been especially troubling in the Manhattan luxury real estate world, where the sales and rental markets have traditionally been upheld by young financiers with money to spend. But it turns out that the relationship between Wall Street and the Manhattan rental apartment market is not as strong as once believed, because Wall Street's struggles have yet to affect the luxury rental market.

According to data compiled by Nancy Packes Inc., 58% of renters below 96th Street in Manhattan made their money in finance in 2005. This year that number is down to 41%, yet the market hasn’t missed a beat. What changed? The economic landscape of New York City is now broadening and diversifying as tech- and creative-companies fill the void left by the decline of Wall Street. People in the tech and creative sectors now account for 12.8% and 13.5% of leases south of 96th Street, respectively, up from 7.2% and 8.57% in 2005. The tech-industry especially has picked up the slack for the Street, so times really have changed - brokers are almost as likely to run into a computer programmer looking to lease an apartment in Manhattan as they are a banker.

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Manhattan Rental Inventory Could Increase By Late 2013

The WindermereWe’ve already written extensively about scarcity in the rental inventory in Manhattan. A lack of available apartments will be one of the dominant themes of 2012, mostly due to economic uncertainty. The current economic climate has had the dual effect of preventing developers from constructing new buildings, and pushing people who would otherwise buy condos into the rental market. Yesterday the Wall Street Journal published figures that quantify the market’s scarcity. There will be roughly 2,230 apartments for rent in Manhattan that will go on the market this year, the lowest amount since 2005, when the figure was first counted. And the vacancy rate for all luxury rentals in Manhattan is 1.27%.

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The Continental in Midtown West Fills Up

The Continental—a 5The Continental3-story building on 32nd Street and Sixth Avenue—announced today that it is all sold out. That’s right, the building that lingered in construction for two years and underwent a name change filled up in less than a year. Call it the success story of the week, and good news for the high-priced, low inventoried rental market.

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