Manhattan Apartment Rents Soar The Most On Record 

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by Tyler Durden
Friday, Nov 12, 2021 - 12:20 AM

We've been documenting a massive divergence in Manhattan real estate, one where residential housing is coming back to life in a post-pandemic world, but commercial real estate remains dead. 

The latest data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate shows median rent for Manhattan apartments surged 18% in October from a year earlier to $3,382, the most on record, according to Bloomberg

The borough is one of the hottest rental markets in all of the city. Jonathan Miller, president of Miller Samuel, said a shortage of homes in suburban markets had led some people to find better upgrades in the city.

"There are more people understanding the relationship of where they want to live and where their employer wants them to work from," Miller said.

Demand for luxury apartments pushed overall rents higher. Complexes with door attendants and a front desk saw rents soar 25% to $4,263 compared with non-doorman properties, only rose 7.4%

As for studios, rents surged 17%, one-bedrooms increased 16%, and two-bedroom rents jumped 26%. Miller said each benchmark set a new annual growth record last month. 

Meanwhile, the number of new leases sank 22% from a year ago to 4,395 as the housing market returned to normal levels. 

When it comes to supply, the number of available apartment rentals across the city has become scarce. In the last week of September, real estate firm StreetEasy reported that apartment inventory stood at 15,541, a considerable decline from the 48,753 rentals available in September 2020

People are flocking back to the city or upgrading to more affluent parts as back to office slowly returns for some workers. Kastle Systems, whose electronic access systems secure thousands of office buildings across NYC, shows an increasing number of workers returned to the office at the beginning of November. Since September, the index has risen nearly fourteen percentage points from 20% to about 34%. Overall, the index remains well below pre-pandemic levels. 

With that being said, commercial real estate in the borough remains in turmoil. Rents plunged last month the most in five years—an enormous glut of storefronts and office space line city streets. 

The massive divergence between residential and commercial real estate can easily be explained. As workers remain at home, foot traffic on city streets is muted, and in return, spending at storefronts slumps. People still need a roof over their heads but are more frequently using Amazon to avoid in-person stores.