Manhattan landlords have seen new leases jump by almost 30% over the past year, but boy did they have to work hard for it.
There were 4,046 new leases signed in November, up 29% from the 3,987 recorded in the same month in 2015, according to a report Thursday by appraisal firm Miller Samuel on behalf of Douglas Elliman Real Estate.
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The new leases came at a price, as landlords had to offer added perks—known as concessions—to get renters to sign amid a flood of new development rentals, especially high-end ones. Listing inventory rose 24.7% over the past year to 7,283 last month.
At 25.1%, the share of rentals with landlord concessions, which include things like a free month’s rent or payment of brokerage fees, was the highest since records began being collected six years ago. A year earlier, only 13.5% of apartments came with concessions.
At higher-end doormen buildings, which account for about 50% of the rental market, that figure was even higher at 32.6%. Those buildings without doormen saw concessions occurring in about 16.9% of leases.
Manhattan landlords also agreed to trim 3.8% off asking rents, up from 3.2% a year earlier, in order to get prospective tenants to sign the lease.
As a result, the median rental price was down 0.3% to $3,350, but when the value of concessions was included, it declined 1.6% to $3,264. In the luxury sector, defined as the top 10%, rents were broadly flat at $8,600.
"What we have is a big increase in new leases signed, which means that the use of concessions has been effective in the sense of attracting people to sign new leases," said Jonathan Miller, the chief executive of Miller Samuel and author of the report.
In Brooklyn, it was a similar story. The share of new leases with concessions also reached a record high of 15.4% in November, compared with 6.6% a year ago.
The concessions appeared to work their magic, as new leases signed jumped 38.5% over the same period from 756 to 1,047. November is traditionally a slower month for rentals due to the upcoming holiday season, Mr. Miller said. But in this case, new leases surged as tenants were able to negotiate good deals because listing inventory rose 29% year-over-year to 2,606 on the back of a lot of new construction.
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The median rental price was 1.3% lower year-over-year at $2,780 per month, representing the fourth slide in five months. Including concessions, it was 2.1% lower at $2,738. For the luxury sector in Brooklyn, it was 16.6% lower at $4,900 as a lot of the new product coming to market is skewed to the higher end.