Manhattan Renters Scoop Up Lingering Units in Discount Frenzy

(Bloomberg) -- Even Manhattan's longest-lingering apartment units are finding takers amid landlord discounts that sent new leases surging.

Apartment contracts jumped 89% in March from a year earlier to 4,986, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest leasing total for the month in over a decade of record keeping.

Manhattan apartment hunters are seeing opportunity in a market that's swollen with inventory, where landlords are offering record incentives. Units that found takers last month had average discounts of 6.8% off the original list price, the second- highest markdowns since the pandemic began, the firms said.

Listings that found tenants spent an average of 100 days on the market -- the longest wait time since February 2009. That suggests that even the oldest offerings are now drawing interest, said Jonathan Miller, president of Miller Samuel.

Despite an uptick in demand, clearing the inventory of empty apartments remains an uphill battle in a borough where office workers are still largely remote and cultural life remains limited.

At the end of March, there were 19,633 empty units seeking tenants, according to Miller Samuel and Douglas Elliman. There were nearly 24,000 at the end of February.

The figures are higher than previously reported because Douglas Elliman changed its listing system last month and is now able to capture more rental inventory for analysis, said Miller, who compiles the monthly report.

The apartment vacancy rate, calculated using the new system, was 11.25% in March.

Stabilizing

Rents appear to be stabilizing as the city enters what is considered the prime leasing season of the spring and summer months. Median rent for Manhattan apartments, after concessions are factored in, was $2,975 -- up 4.6% from February, for the biggest month-over-month climb since the pandemic began.

But it's still 14% less than median rents last March -- when there weren't so many apartments on the market.

“With inventory still being so elevated, I don't see rents posting noticeable gains in the near future,” Miller said. “There's still too much out there.”

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