Rental Deals: Change is Underway

At a rental industry event today in Midtown Manhattan, executives from a major landlord with over 2000 residential rental units in Manhattan acknowledged a market recovery in its early stages. They talked about how they are responding to higher occupancy rates, more consumer traffic, and rental incentives that have fueled the declined rental market over the past year.  In the most prime locations, owner-paid broker commissions (also known as OPs) and free rent incentives are being taken back, leaving tenants to pay today’s market prices without the benefit of “net effective” rents.  This also puts the responsibility for the broker fee back in the tenant’s court.

This landlord, who graciously sent three of its top brass to discuss the marketplace with rental managers and principal brokers from the most notable brokerage companies in Manhattan, noted that the one sweet spot in the city for consumers to capture bargains is Midtown West.  They, along with Silverstein, Rockrose and Glenwood, have added hundreds of new residential units in the Hudson Yards district – with more now under construction.  Consumers can continue to expect the big discounts, bargain prices, free rent incentives and owner paid fees in this neighborhood for the foreseeable future.

It is interesting that since October 1, our listings department has identified major landlords such as Rockrose/TF Cornerstone, Archstone, Related Management, and Equity Residential, who have removed owner paid commissions and free rent incentives in prime neighborhoods such as Chelsea, Greenwich Village, TriBeCa and even the Financial District (in some cases).  Other major landlords continue to pay brokers and give discounts; however, the four landlords mentioned here account for more than 10,000 residential rental units in Manhattan.  It is clear that a change is underway.

This new disparity in the changing market makes it more important than ever for consumers to identify a good broker / agent and stick with them.  We offer a unique perspective on the marketplace, as we keep up with which landlords are offering the best values, and where the definitions of value are changing.  While it might seem like a good use of time for a consumer to canvas each of the major landlord portfolios in search of bargains and discounts, a simple phone call to a reputable broker could yield the same information in a single conversation thus saving you time and we all know “time is money”.