(BN) Manhattan Apartment Rents Drop 9.4% as City Job Losses Mount

By John Gittelsohn Jan. 14 (Bloomberg) -- Manhattan apartment rents dropped 9.4 percent in the fourth quarter of 2009 from a year earlier as Wall Street jobs vanished in the recession. The median rent fell for all apartment sizes except two- bedrooms, which were little changed, according to a report today by broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. A separate... [more]

By John Gittelsohn Jan. 14 (Bloomberg) -- Manhattan apartment rents dropped 9.4 percent in the fourth quarter of 2009 from a year earlier as Wall Street jobs vanished in the recession. The median rent fell for all apartment sizes except two- bedrooms, which were little changed, according to a report today by broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. A separate tally by broker Citi-Habitats Inc. showed the average apartment price declined 7.3 percent for the year. The company didn’t report medians. New York City lost 25,200 finance jobs in the 12 months ended Nov. 30 and the unemployment rate climbed to 10 percent, curbing tenants’ appetite for bigger and more expensive apartments. Joblessness also forced landlords across the U.S. to cut prices as the nationwide vacancy rate reached a record 8 percent in the fourth quarter, New York-based research firm Reis Inc. said Jan. 7. “I don’t think you’re going to see a significant improvement, if any, in 2010, with unemployment in the 10 percent area,” Miller Samuel President and Chief Executive Officer Jonathan Miller said in a telephone interview. The effective decline in Manhattan apartment costs was likely greater than either broker reported because the figures don’t reflect concessions such as a free month’s rent, Miller said. About half of 2009 rentals came with such enticements, said Citi-Habitats President Gary Malin. “These days, the landlord’s goal is to get tenants,” Malin said. Prices by Size The median rent for a Manhattan studio fell 8.5 percent in the fourth quarter from a year earlier to $2,100, Miller reported. One-bedrooms declined 11 percent to $2,850; two- bedrooms cost $4,700 a month; and three bedrooms were down 18 percent to $6,588. Luxury prices were little changed at $8,663, Miller reported. Many people in that price bracket sold co-ops or condominiums and were waiting to buy again, said Shelley Saxton, a broker for Brown Harris Stevens. “They want to be in a position they can pull the trigger and buy,” Saxton said. “For now, they’re sitting on the sidelines.” The time apartments spent on the market declined 22 percent to an average of 76 days, Miller said. Manhattan’s fourth-quarter vacancy rate fell to 1.76 percent from 1.96 percent, Citi-Habitats said. The company used its own data and counted more than 2,600 deals during the quarter. Prudential Douglas Elliman and Miller Samuel culled their information from 2,456 transactions recorded by the Real Estate Board of New York, a trade organization. Transactions Rebound Transactions recorded by Rebny jumped almost 48 percent in the fourth quarter from a year earlier, just after Lehman Brothers Holdings Inc. filed for bankruptcy. “We’re seeing consumers come back because they’re taking advantage of lower prices,” Miller said. “We’re not arguing that Manhattan is an inexpensive place to live, but relative to what it was, rents are less.” Citi-Habitats reported a 30 percent increase in rental transactions. The company handled almost 13,000 rentals in 2009, including almost 2,000 newly built apartments, said Clifford Finn, managing director of new development for the brokerage. The company’s largest project was Silver Towers, a 1,254- unit complex at 620 W. 42nd St. developed by Silverstein Properties Inc. Silver Towers features a 24-hour concierge, valet dry cleaning, a fitness center and 75-foot indoor pool. Rents for one-bedroom apartments in the 60-story tower start at $2,965, with the first two-months free on a 14-month lease, Finn said. SoHo Rents Highest The SoHo/TriBeCa neighborhood had the highest rates in Manhattan, with one-bedroom apartments averaging $3,145 a month, Citi-Habitats said. SoHo/TriBeCa also had the lowest vacancy rate at 1.05 percent. Miller, who divided Manhattan into four quadrants, reported the West Side had the highest median rent at $3,495, up 5.9 percent from the fourth quarter of 2008. Rents fell 19 percent to a median of $2,600 on the East Side between 42nd and 96th streets. Downtown rents dropped 7.7 percent to $3,000, Miller said. [less]