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With Rents Hitting Bottom, Apartment Hunters Are Locking in Longer Leases

Renters in NYC have now concluded that these prices won’t last long, May saw a record number of leases. The tallest building in Miami now breaking ground.

Manhattan, New York (Photo by Terry W. Sanders)

Rental hunters in New York City have come to a conclusion: rents have bottomed out. As a result, they’re locking in longer lease terms—creating a spike in lease lengths in the past three months.

That’s one of the findings in the Miller Samuel Report for the rental markets for the month of May.

“One of the patterns we notice is that beginning in March, there was a surge in average lease lengths,” says Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report. “I look at it as a sentiment indicator: Tenants are looking to sign longer term leases because they have the understanding that rents have seen some sort of stabilization or modest uptick,” he says.

his is of course an average of all different types of lease lengths—and not all landlords agree to longer leases. And the trend “does not necessarily mean the entire market is expected to return to rent levels seen pre-Covid in short order,” Miller says.

In May, Manhattan landlords saw the highest number of new lease signings since the tracking began in 2008. There were 9,491 new leases signed, an increase of 4.4 percent from April (9,087) and over four times the number of new leases in May 2020 (2,190).

The vacancy rate (aka the number of vacant apartments) last month was 7.59 percent, compared to 11.6 percent in April this year and 2.88 percent in May 2020.

If you’re looking for some data that will give you an edge as a renter, non-doorman rents in Manhattan are down more than doorman rentals, and rents are comparatively lower for smaller apartments. The report also found that new development saw its biggest share of the market in more than a year, and the luxury median rent was the only price segment to rise year over year.

All of these trends appear to fit the same narrative, NYC renters have been using this moment as a time to trade up and gain larger apartments, better amenities, or a coveted address, or all of the above.

The number of rental concessions given by Manhattan landlords rose again to the third-highest level since 2008—which is contradicting what some brokers are experiencing.

“Concessions were already elevated pre-Covid,” Miller counters. The share of Manhattan leases that came with some kind of concession in May was 40.5 percent and in April it was 48 percent. Back in May of 2019, that share was 33.9 percent.

Miller says concessions have been “trending down modestly since the beginning of the year, but not plunging.”



Work to begin on Miami Beach’s Tallest Building

Terra, GFO Investments and New Valley plan to break ground this month on Five Park, a 48-story, roughly 280-unit tower at 500 Alton Road that will become the tallest building in Miami Beach at 519 feet upon completion in 2023.

Five Park will feature two, three, and four bedroom and penthouse condominium and multifamily units. “Building amenities,” the press release said, “will include an amenity deck with two swimming pools, a restaurant, sunset viewing lounge areas, a resort-style spa, and a state-of-the-art fitness center with outdoor exercise areas.”

The building is designed by Arquitectonica, the Miami-based firm behind such Miami-Dade projects as Brickell City Center, Mr. C Miami in Coconut Grove and the upcoming Grand Hyatt Miami Beach Convention Center Hotel.



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