Manhattan Rents Jump Most On Record Despite Dismal Back-To-Office Return

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by Tyler Durden
Saturday, Dec 11, 2021 - 01:00 AM

Even though the Omicron variant scare has slowed the back-to-office return across Manhattan, demand for apartments in the borough is booming.

According to a new Miller Samuel Inc. and brokerage Douglas Elliman Real Estate report, median rent skyrocketed 23% in November compared with the same period last year to $3,369. The increase was the most on record as people are returning to the city for the nightlife, not necessarily back to the office. 

November's increase was the largest in a decade of Miller Samuel Inc. and brokerage Douglas Elliman Real Estate's housing data, though median rent remains 3.8% below pre-pandemic levels. 

Apartments are in high demand even as Kastle's "Back to Work Barometer" for the metro area shows only 31% of office workers are back. This suggests that people are still working from home but want to be in the city as they miss cultural institutions, restaurants, bars, and nightlife. 

"They just want to get back into the city -- they've been away long enough," Hal Gavzie, executive manager of leasing for Douglas Elliman, told Bloomberg. "There's a kind of fatigue with being out of Manhattan and missing it."

Last month, upscale apartments in doorman buildings accounted for the most significant rent surge. The median rent jumped 27% from a year earlier to $4,108, above the November 2019 median of $4,016. Apartments without door attendants were in low demand. There was no reasoning why upscale apartments with helping staff were in high demand. One suggestion is the safety of the building as the metro area experiences a surge in violent crime under progressive leadership. 

Meanwhile, on the commercial side of the market, retail rents plunged across Manhattan in October. An enormous glut of commercial restate, such as storefronts and office space, remain unleased. 

More than a year ago, we noted NYC's road to recovery would lag the rest of the country as the downturn could last until 2023.