Concessions given to renters by landlords, such as a free month’s rent or payment of broker’s fees, are still very much in play in Manhattan’s rental market, according to a report Thursday by Miller Samuel and Douglas Elliman Real Estate.
Indeed, landlord concessions were the second highest on record in February and much more prevalent than a year earlier, with the share of new rental transactions coming with concessions rising from 16.4% to 26.4%.
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Landlords have been employing this tactic often over the past few months amid an oversupply of new rentals (listing inventory was up 11.7% year-over-year) in a bid to protect base rents but offer renters an incentive.
So far, it seems to be doing the trick, with median prices in Manhattan slipping just 0.9% to $3,350 in the year to February. When taking these concessions into consideration, the median rental price declined 1.7% over the year to $3,260.
Jonathan Miller, the chief executive of Miller Samuel and author of the report, told Mansion Global that the sweeteners were encouraging many existing tenants to re-sign their leases, while the number of new leases fell 27.9% to 3,634 in Manhattan.
He added that it was an almost identical story in the neighboring borough of Brooklyn, with the amount of landlord concessions also being the second highest on record.
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The share of new rental transactions with concessions in Brooklyn was 15.7% in February, up from 12.9% a year earlier, while the median rental price slipped 1.3% to $2,750. This was $600 less than median rent in Manhattan.