By Roland Li
A tightening vacancy rate has led to a Manhattan rental market favorable to landlords, according to two studies released by Citi Habitats this week.
Although the market was relatively balanced between landlords and tenants at the beginning of 2010, the vacancy rate dropped to 0.98% in May 2010, based on the brokerage’s data.
At the beginning of last year, 47% landlords were offering concessions such as one month of free rent or payment of the broker’s fee, but the rate was down to 18% by October, and the by the end of the year 22% of landlords were offering concessions. The number continued to fall in the first quarter of 2011.
Rents remained stable in 2010 with no major changes across apartment types, but declining concessions signaled a shift in the market in favor of landlords, according to the brokerage.
“The Manhattan rental market shows no signs of losing steam,” said Gary Malin, president of Citi Habitats, in a statement. “Attractive opportunities still exist when compared to the market’s peak prior to the 2008 recession, but in this competitive marketplace, apartment seekers need to be prepared to act fast to secure their chosen apartment. Summer should only increase activity in an already booming market.”
In April, rents for studios, one-bedroom, two-bedroom and three-bedroom apartments were up slightly compared to the previous month. The vacancy rate was 0.94%, down from 0.99% in March, and a 24% decrease in available apartments compared to April 2010, when the vacancy rate was 1.23%.
Only 11% of landlords offered concessions in the last month in deals brokered by Citi Habitats, down from 41% in April 2010.
Leasing activity has also been brisk in Citi Habitat’s new developments, including the Frank Gehry-designed tower at 8 Spruce Street and the Continental at 885 Sixth Avenue, designed by Costas Kondylis and Goldstein, Hill &West. The latter is around 55% leased after coming on the market in January.
