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We've noted for awhile now that rental concessions are not as plentiful as in the recent past, and yesterday's Fourth Quarter Residential Rental Market Report from CitiHabitats observes that landlords offered concessions on only 22% of rentals, compared with 66% a year earlier. It's a noticeable decline, though 22% is still fairly high in a market that often sees few to no concessions. Today's Fourth Quarter Manhattan Market Overview, released by Prudential Douglas Elliman, also noted a reduction in concessions, to about 40% of rentals.
But is the trend already showing signs of reversing itself?
BrickUnderground spends a fair amount of time sleuthing around online* for concessions, and since around New Year's we've been noticing an uptick in concessions. Some of the landlords/properties currently offering deals are familiar to us (for example, Milford Management and new developments like Port 10 in Chelsea), but we are also noticing new offerings throughout Manhattan and a few in Williamsburg as well.
A year-end Financial District report by Platinum Properties noted yesterday that many FiDi landlords began adding concessions toward the end of the year even though inventory remained tight, with no new rental buildings being added. The reason? In summer 2009, many buildings offered 18-month leases now coming up for renewal in the traditionally slow winter market.
Our take: With the outlook uncertain as to whether the rental demand will be strong enough to absorb new inventory in the near term (particularly in the rental doldrums of winter), more landlords are heading down concession lane. However, possibly in an effort to provide a sense of a stronger market, they're not advertising deals as openly as before. For that reason, and the fact that each building's concession situation can change rapidly, it's essential to ask whether or not a landlord is offering any incentives to sign.
*To search for rental concessions on StreetEasy.com, click on "advanced search," check the box "description includes" and type in the words "free rent." We also recommend you check out the concession list on no-fee rental website UrbanEdgeny.com.