Manhattan apartment landlords are getting desperate as inventory swells, and they are offering some of the most concessions ever to attract new tenants, according to Bloomberg.
Appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate published a report this week that showed the value of incentives for new tenants averaged out to 2.3 months of free rent in January, the most on record.
"You've got to keep sweetening the pot," said Jonathan Miller, president of Miller Samuel. He added the purpose of incentives is "to temper the decline."
The "decline" Miller refers to is the plunge in the borough's residential real estate market following the pandemic. Work-at-home continues to dominate as office buildings remain empty. Tens of thousands of city dwellers have moved to suburbs or rural communities to escape the metro area's socio-economic implosion. All this has culminated into record-high inventory, and a sharp drop in rental rates as supply becomes an issue.
However, there was some good news. Last month, new lease signings soared 58% from a year earlier to 6,255. Even with the influx of new tenants, inventory still sits at a decade high.
The last year has been painful for landlords. In a past report, Miller warned that a surge in new leases should not be viewed as an "imminent recovery."