While landlord sweeteners are still prevalent across the rental market in Manhattan, the higher-end market is seeing fewer leases come with concessions, according to a Douglas Elliman report released Thursday.
In October, 41% of the 4,842 new leases signed came with some sort of incentive for renters, such as free rent, gift cards and/or broker fees paid by owners. In the same month last year, 28% of leases came with concessions.
By comparison, the luxury rental market had fewer concessions. And the higher the price point, the lower the share of the leases with concessions, said Jonathan Miller, author of the Douglas Elliman report and chief executive of real estate appraisal firm Miller Samuel.
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Within the luxury rental segment, defined as the top 10% of the market, 39.9% of leases came with landlord concessions. The median rent for this segment, which comprised 486 leases, was $8,348 per month, down 0.6% year-over-year. The average luxury rent also fell 1.8% to $9,907.
For leases priced at at least $10,000 a month, 24.1% came with concessions; 16.4% of $15,000-plus leases were transacted with landlord sweeteners.
The trend was not reflective of a stronger higher-end luxury rental market, Mr. Miller said, but rather is due to "greater adjustment of pricing by luxury landlords."
"As luxury landlords priced their properties more in line with market demand, they didn’t need to make higher concessions," he said.
As a result, the median rent of $10,000-plus leases increased just 1.9% year-over-year to $13,500; and median rent for the $15,000-plus leases was $18,000, increasing 1.7% year-over-year.
However, the number of $10,000-plus leases signed in October dropped 6% to 141, and the number of $15,000-plus leases fell 5.2% year-over-year to 55.