A new report from Bloomberg Intelligence on New York City Apartment Pricing has found that REIT-owned apartments in New York rent for considerably more than privately owned buildings.
Senior analyst Jeffrey Langbaum found that Real Estate Investment Trust-owned apartments benefit from such factors as demand for housing within a short commuting distance and average purchase prices approaching $2 million.
According to the research, rents have climbed 6.4 percent this year, from the leasing sites of four REITs with a large residential presence in New York.
When looking at REIT owned apartment by neighborhood, rents per square foot of available apartments in buildings are up 14.5 percent in Chelsea and 10.7 percent in Flatiron, while dropping 1.3 percent in Hoboken, according to the research.
Renters are flocking to short-commute neighborhoods, as demand lags in more distant areas.
Brooklyn’s 9.8 leasing leasing growth is indicative of this, says Langbaum; three of the four REIT buildings in the borough are a 10- to 15-minute commute to the Financial District.
Other findings include:
• In New York’s Midtown West, renters will pay $416 more a month on average to rent a one bedroom than they would have six months ago.
An influx of tech jobs at companies such as Google and Twitter in Chelsea are drawing people to the neighborhood, while the rise of luxury buildings such as Extell’s One57 show the increased appeal of residing in the area.
• REIT buildings in Flatiron, Bowery and Chelsea garner more than $80 a square foot, above REITs’ $71 New York City average.
• The Upper East Side, home to seven SL Green buildings, has the lowest Manhattan rents at $61 a sq. ft., and is trailed only by Long Island City, Hoboken and Jersey City.
• Equity Residential’s Beatrice Apartments in Chelsea has among the priciest one-bedrooms at $6,120 a month, or $117 a sq. ft. annualized.