Record concessions continue to drive new apartment leases in Manhattan as renters seek to capitalize on falling rents to trade up.
New lease signings surged 112% in February over the same period last year, according to Bloomberg, citing a recent report via appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
Even though desperate landlords in the borough offered the most concessions ever to attract new tenants, there was still an overabundance of inventory. Incentives for new leases equated to 2.1 months of free rent, and approximately 41% of leases came with concessions, the report said. Manhattan's listing inventory soared 154% in February to 11,750 units.
Manhattan's average rent declined 14% in February compared with last year. Landlords continued sweetening the pot to attract new tenants. The report also noted luxury apartments saw a 13% rent reduction to an average of $10,209.
"People aren't going to return to Manhattan until they feel safe," the report said. "We're seeing that gradually becoming less of a concern."
A massive overhang of inventory has been painful for landlords and highly beneficial for bargain hunting millennials as some trade up for larger living accommodations.
In a prior report, Jonathan Miller, president of Miller Samuel, warned that the latest rebound should not be viewed as an "imminent recovery."
There's still a lot of uncertainty about whether the rental market can rebound given a massive outflow of city dwellers to surrounding rural communities. Nevertheless, the latest developments are welcoming given record concessions and falling rents slowly chip away at inventory.