Manhattan’s super luxury rental market gained some steam in July, with 71 new contracts signed at a monthly rate of $15,000 or above, according to a Douglas Elliman report released Thursday.
The number of super luxury leases signed represented a 22.4% increase from a year ago. Compared to June, July had five more contracts within the most expensive price range. The median rent in this thin segment rose 1% year-over-year to $19,750 per month.
There were 179 new leases with a monthly rent of $10,000 or more in July, up 10.5% year-over-year. But median rent in this category dropped 2.3% to $13,500.
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"The super luxury rentals continued to show resilience, but overall, the luxury rental market saw some slippage or stabilization," said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report.
The average rent for luxury rentals, those comprising the top 10% of leases with an entry threshold of $6,290 in July, slipped to $9,980 from June’s $10,039. The median rent, a more stable metric than the average rent, fell to $7,875 in July, a 0.2% decline from a year ago.
Landlords Make Concessions to Keep Base Rent Afloat
Across the board, Manhattan’s rents remained relatively stable from a year ago. Median rent for the 6,133 new leases signed in July was $3,450, exactly the same as in July 2016. The average rent rose 1% to $4,109 from a year ago.
However, landlords had to make concessions to keep rents from falling. In July, 26.5% of new leases were sweetened, with an average 1.3 months of free or owner-paid rent, according to the report.
Taking out the concessions, the net-effective median rent in July was $3,350, down 1.9% year-over-year and the biggest drop in three-and-a-half years.
"Concessions continued to work in the boroughs—keeping vacancies from rising, but the rent trends are clearly weakening," Hal D. Gavzie, executive manager of leasing at Douglas Elliman, said in the report.
Manhattan’s vacancy rate was 2.08% in July. By comparison, it was 2.49% a year ago.
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Outside of Manhattan, Brooklyn and northwest Queens, the other two New York City areas Douglas Elliman tracks, diverged in rental market performance. Brooklyn’s median rent fell 1.1% to $2,795 in July, while median rent in northwest Queens rose 8.3% to $2,998 per month.
But the two areas continued to appeal to luxury renters who are priced out of Manhattan. Brooklyn’s median luxury rent reached $5,575 per month, a 2.2% increase year-over-year; median luxury rent in northwest Queens climbed 7.5% to $4,748 per month.
SoHo/Tribeca Was the Priciest Neighborhood for Renters
A rental report released Thursday by Citi Habitats had similar findings about the Manhattan market. According to the report, July’s median rent was $3,511 per month, a mere $3 more than a year ago.
The most expensive neighborhood for renters was SoHo/Tribeca, with a median rent of $5,995, according to Citi Habitats. Gramercy/Flatiron was the second-priciest area, with a median rent of $4,350 per month.