(Bloomberg)—In Manhattan’s weakening rental market, no-frills apartment buildings were an oasis for landlords -- the one segment where rates were still going up as the properties attracted bargain-hunting tenants. That streak’s now over.
The median rent in buildings without doormen fell 1.9 percent in October from a year earlier to $2,840. It was the first decline for the category in 20 months, and the biggest since February 2014, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
In buildings with doormen, the trend reversed. Rents at those properties climbed 1.3 percent, the biggest increase in more than a year and a half, to a median of $3,900.
It’s not that tenants were more willing to pay up for pools and yoga rooms. But landlord concessions at some of these fancier buildings -- such as rent-free months and complimentary access to gyms -- have made the properties a compelling, if slightly costlier, option.
“A lot of these doormen buildings have a lot of vacancies and they are offering quite a bit of incentives,” said Hal Gavzie, who oversees leasing for Douglas Elliman. “Rental customers are looking for the best deal they can get.”
At buildings with doormen, concessions were offered on 35 percent of all new leases signed in October, the second-highest share this year, according to Jonathan Miller, president of Miller Samuel. At non-doorman properties, 20 percent of deals included incentives.
There were 2,322 new leases at doorman buildings last month, 15 percent more than a year earlier, while signings at non-doorman buildings climbed 11 percent to 2,260.
“If you’re looking at two apartments,” Miller said, “and one is in a full-service building and one isn’t, and the difference in rent is a hundred bucks after concessions, maybe you go to the doorman building.”
To contact the reporter on this story: Oshrat Carmiel in New York at [email protected] To contact the editors responsible for this story: Daniel Taub at [email protected] Christine Maurus
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