Regular rental buildings down 20%

...and why is the bit about no two free months "obvious"?

In my Archstone building, the management is offering renewals to current tenants at their current rents. No discounts, no negotiations. Meanwhile, the exact same sized apartments are offered for rent at hundreds, maybe a thousand a month less. No wonder there are moving trucks --removing belongings-- every single day. And no wonder there are so many vacancies in the building.

mucuk, the two free months are incentives available to new renters only. I'm hoping they keep offering them and plan on hopping buildings a bit if necessary to take advantage of them, although I just signed in March.

20% off without having to negotiate is wonderful. Thanks for the intel, Gleeclub. My impression of Rose Associates has been that they are a very good management company - does anyone else have an opinion on them? I am not a tenant of theirs.

Two months free to existing tenants happens too, I know people who have gotten that - especially in Fidi. SOME companies won't do that, but MOST companies prefer that in fact to lowering notional rents. Especially in rent-stablized buildings.

Which Rose building, if you don't mind stating?

My impression, confirmed by some public statements by their management, is that Rose has been aggressively responding to market conditions to keep vacancy low. Who knows if their web site has a full and accurate listing of inventory, but it sure seems like they have far fewer apartments for rent than most similar agencies.

I know several people who live in Rose buildings, and nearly all have gotten 15-20% discounts with the option to re-up for two years if they want to. (I guess Rose is bearish on the future of rents, given that they're willing to "lock-in" tenants at much lower rents.) Many other landlords are offering only free months or other gimmicks, and I haven't heard of anyone in a non-Rose building being offered the opportunity to lock in deep discounts for two years.

I'm guessing anywhere midtown east or west or FiDi.

Rose is a very long term NY company (unlike others, like, say Related). They have seen a lot of past cycles and have almost always been right in their past guesses as to what to do in terms of repricing units. And while I don't know where their debt position is right now, they also historically have not over-leveraged their buildings, so the choices they make are usually not based on any sort of desperation. So, as a total guess, I would say the most likely thing is that they are ahead of the curve, since that's where they usually are.

We also had the experience of a proposed renewal at flat rent. A phone call later and they were 15% below that, and still moving...

In January I negotiated my lease renewal down to what I thought was reasonable. Two months later they adverised an availablity only three floors down for several hundred less than what I had requested and gotten. Also have a scary sounding clause in the lease forbidding me to discuss the terms of my lease with anyone threatening legal action, etc. if I violated it. Interestingly, this clause had been introduced one year earlier before rents started to fall.

are you serious: Also have a scary sounding clause in the lease forbidding me to discuss the terms of my lease with anyone threatening legal action, etc. if I violated it.

a confidentiality clause in a lease?

We recently left A Brodsky-managed building. They offered us a renewal at the existing rent; no discounts. When we told them we would leave, they didn't care. I'm guessing that this is their approach towards all the existing tenants, since there has been a steady steam of people moving out over the last few months, and no one moving in. However, a friend of mine moved into another Brodsky building with 2 months free and greatly reduced rent. I don't understand the willingness to let good tenants walk when they know they can't rent for the previous price. They even wrote a very nice letter of recommendation to our next LL - but they made no attempt to keep us.

StF62, I agree with your perplexed point of view. The only thing I can figure is that in the coming months, when all these empty new condos decide to go rental, and the new rental developments are completed (there are 3 in my immediate neighborhood) then and only then will these management companies wake up and smell the coffee.

I am figuring if the management is unreasonable at my renewal time, I just may decline to renew my current lease, then wait for my apartment to be listed on the web site as "available" (at a reduced rent, of course) and then rent it anew.

Its simple. There are a lot of people in management that remain in denial. GM had a 30 year strategy of denial---which worked until it didn't. Lets face it, its a pain to have to move and there are clear costs involved. It's going to take more time.

gleeclub, yes, a confidentiality clause. Lengthy and detailed.

We live in the Ellington. They lowered our rent $200 a month and offered us a free month in addition. We'd like a bigger apartment in the same building and none seem to be available so they wrote a 60 day lease cancellation clause into our renewal. We have to exercise the cancellation option by July 1st and be out by July 31st.

We both happen to be out of the USA at the moment so we have to get home and get on it.

Surely someone on Streeteasy has (or knows someone who knows someone who knows of) a great midtown 2/2 with a balcony/outdoor space for about $3400 a month. I'll be back in NYC by Wednesday: cliff@visigy.net

We live in the Ellington. They lowered our rent $200 a month and offered us a free month in addition. We'd like a bigger apartment in the same building and none seem to be available so they wrote a 60 day lease cancellation clause into our renewal. We have to exercise the cancellation option by July 1st and be out by July 31st.

We both happen to be out of the USA at the moment so we have to get home and get on it.

Surely someone on Streeteasy has (or knows someone who knows someone who knows of) a great midtown 2/2 with a balcony/outdoor space for about $3400 a month. I'll be back in NYC by Wednesday: cliff@visigy.net

anyone hear about what rudin is doing on renewal?

A rental company can have 20% empty units before starting the fire sale at 20% discount to everyone (same revenue). As long as the new tenants come in you still maximize your profits.

Most people after moving however are lazy. Moving is a lot of work and for a lot of people also stress full.If you can save a one time USD 5000 on moving is that really worth it?
For me yes, but I know lots of people who would like lower rent but do nothing. The rent is already a part of the budget you got used to.

The winners are the mobile people that are willing to move after every lease period until they get tired of it too.

It's a well known business concept used for almost everything. 0%APR, savings rates, newspaper subscription and on. So why not in renting. It sounds strange but loyal costumers get screwed by almost every commercial business plan.

bump :)

this is just my guess, but I think the cycle goes like this: building holds firm on rents despite evidence of other buildings giving better incentives and rents; success rate in closing prospective tenants who visit falls and falls and falls, but landlord holds firm; finally, after a couple of months and extremely discouraged rental office staff, landlord relents, adds and incentive or cuts rents, sees big uptick in signings - - and then repats the whole cycle.

It seems like it's mostly a stalling tactic - - landlord hoping to snag some uninformed renters who don't have the discipline or stamina to search too hard, then finally giving in but as late as at all possible. But for their money, if they've stalled even a month or two, and then they can get a couple more tenants to renew without having to lower prices much for them, it's worth it. every renewed tenant at an inflated (or unsustainable) rent is a 12-month win for the landlord.

i think part of the problem is that there's always a new stream of prospective tenants looking, but those would-be tenants don't really have any ability to trash a building's reputation as unresaonable. they just scratch their heads and move on. a month or two later, it's an entirely different set of tenants out there looking. so there's really much lower consequences for a landlord stalling on dropping rents to get in line with the market than it would seem.

I moved in to a luxury new rental development by a big landlord, although not one of the top 5. 2 months free on a 14 month lease, but the 2 months was up front so I paid the security and 1 month, and then for the next 3 months I didn't have to make another payment. It was important that I got it up front. And the in house gym and bike storage were given without charge.

building name please ohreilly

mucuk: and why is the bit about no two free months "obvious"?

I'm seeing lots of people looking to break leases, etc.. Also people moving to take advantage of a couple of free months for a lower net effective rent. Moving is a hassle, will they move a second time after the "net effective" goes up because there is no discount after the first year? Suggestion - go for as low as possible for your recurring monthly rent, and forget the gimmicks.

Glenwood did not lower their rents for pple that have been there for yrs. New pple get a lower rate and one month free. Not fair.

As a co-owner of a number of rental buildings, I think Glenwood and Archstone are being stupid. In the age of the net, tenants know what's going on.

Having looked to rent at an Archstone building recently, I couldn't agree more with flatironj.