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Looking for a Manhattan rental without a broker’s fee? You’d do well to start your hunt in the Financial District, Nolita or Hell’s Kitchen, according to data from apartment search site RentHop.
Of all the apartments listed on the site in November, about a third in the Financial District were advertised as “no fee,” along with 22.2 percent in Nolita and 20.5 percent in Hell’s Kitchen. That’s quite a bit higher than the rate for Manhattan overall, where a scant 12.4 percent of listings were no-fee. The neighborhoods with the fewest no-fee apartments were the Lower East Side (2.6 percent), the Flatiron District (4.5 percent) and Chelsea (6.7 percent).
The reason for the disparity, explains RentHop co-founder Lawrence Zhou, is the presence (or lack thereof) of big, new rental buildings overseen by big, corporate landlords. In the Financial District, many of the apartments available are in former office towers, while in the Lower East Side, the housing is dominated by low-rise walk-ups.
Contrary to popular belief, it’s often the luxury high-rises that offer concessions like landlord-paid broker’s fees or a free month’s rent, as the building owner searches for tenants to fill a slew of apartments at a time. “Smaller landlords are generally not up for giving concessions,” Zhou says. “They’re more okay with having some apartments sit on the market for a little bit.” They’re also more likely to outsource the work of finding tenants to brokers, who pass on their fees to you, rather than having a corporate leasing office oversee operations.
It’s worth noting, however, that a single new development can skew the numbers, particularly in neighborhoods like the Flatiron and Nolita, where there are relatively few vacant apartments at any given time. For example, last year, only 16.5 percent of listings in the Financial District were no-fee, placing the neighborhood in the ninth spot, while Tribeca had the highest concentration of no-fee listings, with 23.7 percent.
Overall, the number of no-fee apartments is down from the same time a year ago. Across Manhattan, 14.7 percent of listings were described as “no fee” last November, or 2.3 percentage points higher than this November. In most neighborhoods, the concentration of no-fee listings dropped or, if they did go up, increased only slightly. The reason? Zhou cites a bevy of new rental buildings hitting the market last winter, when the number of no-fee listings was higher than the previous few years. “That kind of wave of new construction, new inventory, just caused more landlords to offer concessions,” he says.