Manhattan Rental Market Report

Updated: January 2009

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Table of Contents:

• Letter From Our Chief Operating Officer
• A Quick Look
• Mean Manhattan Rental Prices
• Manhattan Price Trends
• Neighborhood Price Trends
  • Upper West Side
  • Upper East Side
  • Midtown West
  • Midtown East
  • Murray Hill
  • Chelsea
  • Gramercy Park
  • Greenwich Village
  • East Village
  • SoHo
  • Lower East Side
  • TriBeCa
  • Financial District
  • Battery Park City
  • Harlem
• The Report Explained

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Letter From Our Chief Operating Officer

On behalf of The Real Estate Group, I am pleased to present the January 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.

Despite the negative end to 2008, as the new year begins, the collective mood here at TREGNY is both excited and hopeful for the Manhattan rental market. So, I am happy to report that there is at least some good news to be had this month.

In direct response to the concessions and price drops that landlords have been offering, vacancies have dropped in doorman buildings almost 7% and 1.27% overall since December. This is the first reduction in vacancies in doorman units since September. These numbers illustrate that offering incentives and being diligent about reducing rents when appropriate is a successful strategy for absorbing inventory. At the same time, it comes as little surprise that non–doorman vacancies are continuing to rise, up another 8.45% since December, as landlords with these units seem to be less willing to be as aggressive with their concession offerings.

However while there is good news this month, there continues to be reminders of the downward pressure Manhattan is experiencing. Rents are still down across the board in both month–to–month and year–over–year comparisons. These numbers reinforce that landlords and property owners should remain vigilant in filling their vacancies via concessions and price drops, especially those with large numbers of vacant units.

Finally, I am optimistic that the negative news of this earnings season may actually be a blessing in disguise for the rental market. With the outpouring of luxury rentals on the market, I am hopeful that the lower bonuses realized this year will increase the demand for higher–end rental units and allow the rental market to gain some ground.

Sincerely,

Daniel Baum, C.O.O.

The Real Estate Group

A Quick Look

Non–doorman Buildings (Average Prices)
	Most Expensive	Least Expensive
Studios	TriBeCa $2,621	Harlem $1,205
One–bedrooms	TriBeCa $3,701	Harlem $1,622
Two–bedrooms	TriBeCa $6,144	Harlem $2,056

Doorman Buildings (Average Prices)
	Most Expensive	Least Expensive
Studios	TriBeCa $2,728	Harlem $1,276
One–bedrooms	SoHo $4,983	Harlem $1,805
Two–bedrooms	SoHo $7,124	Harlem $2,508

Greatest Changes Since December:

• Non–doorman studios – SoHo – Down 9.08% ($211)
• Non–doorman one–bedrooms – Financial District – Up 8.53% ($249)
• Non–doorman two–bedroom – Financial District – Up 7.44% ($302)

• Doorman studios – TriBeCa – Down 9.35% ($281)
• Doorman one–bedrooms – Lower East Side – Down 7.85% ($243)
• Doorman two–bedroom – Lower East Side – Down 10.56% ($485)

Year-over-year Changes:

Non–doorman Citywide Rents: January ’08 vs. January ’09
	January ’08	January ’09	Change
Studios	$2,029	$1,931	-4.82%
One–bedrooms	$2,807	$2,612	-6.96%
Two–bedrooms	$3,919	$3,659	-6.64%

Doorman Citywide Rents: January ’08 vs. January ’09
	January ’08	January ’09	Change
Studios	$2,608	$2,383	-8.63%
One–bedrooms	$3,634	$3,453	-4.97%
Two–bedrooms	$5,338	$5,187	-2.84%

Notable Trends:

Manhattan’s Benchmark Takes a Beating— It seems that no neighborhood is immune to the price drops Manhattan is seeing. Even TriBeCa, the symbol of expensive rents in Manhattan, has taken a hit over the past year. Rents have dropped as much as 21% in year–over–year comparisons for non–doorman one–bedrooms and 5.3% overall.

Manhattan Rains Luxury— A combination of condo buildings turning rental and consumers opting to downsize has left a glut of high–end units on the market in Manhattan – especially in neighborhoods such as TriBeCa and SoHo. While we observed this trend in 2008, the breadth of price points and options available now is far greater than anything we have observed in the past two years.

Keeping Hope Alive— All is not lost Manhattan! The improvement in vacancy rates we observed this month (down 1.27% overall and 6.98% in doorman buildings) prove that the rental market can be moved via appropriate pricing and incentives. As landlords and property owners make adjustments, renters are moving to make deals – and that’s good news for everyone.

Where Prices Decreased:

Harlem—Non–doorman (4.54%), doorman studios (1.60%), non-doorman one–bedrooms (3.58%), non-doorman two–bedrooms (6.90%)

Upper West Side—Non–doorman (2.71%), doorman studios (2.57%), non-doorman one–bedrooms (1.03%), doorman one–bedrooms (2.71%), non-doorman two–bedrooms (0.01%), doorman two–bedrooms (7.49%)

Upper East Side—Non–doorman (0.35%), non-doorman one–bedrooms (1.21%), doorman one–bedrooms (0.88%), non-doorman two–bedrooms (4.36%)

Midtown West—Non–doorman (4.82%), doorman one–bedrooms (1.07%), non-doorman two–bedrooms (4.11%), doorman two–bedrooms (2.89%)

Midtown East—Non-doorman one–bedrooms (4.67%), doorman two–bedrooms (4.21%)

Murray Hill—Non–doorman (2.86%), doorman studios (4.75%), non-doorman one–bedrooms (1.03%), doorman one–bedrooms (3.84%), non-doorman two–bedrooms (2.85%), doorman two–bedrooms (7.32%)

Chelsea—Non–doorman (2.36%), doorman studios (5.26%), doorman two–bedrooms (4.27%)

Gramercy Park—Doorman studios (4.09%), non-doorman two–bedrooms (2.71%), doorman two–bedrooms (5.38%)

Greenwich Village—Non–doorman (1.57%), non-doorman one–bedrooms (0.52%), non-doorman two–bedrooms (4.51%)

East Village—Non–doorman (4.74%), doorman studios (5.24%), non-doorman one–bedrooms (3.87%), non-doorman two–bedrooms (0.75%), doorman two–bedrooms (7.40%)

SoHo—Non–doorman (9.08%), doorman studios (1.96%), non-doorman one–bedrooms (5.86%), non-doorman two–bedrooms (4.43%)

Lower East Side—Non–doorman (6.10%), non-doorman one–bedrooms (0.91%), doorman one–bedrooms (7.85%), doorman two–bedrooms (10.56%)

TriBeCa—Non–doorman (4.43%), doorman studios (9.35%), non-doorman one–bedrooms (8.41%), non-doorman two–bedrooms (6.83%)

Financial District—Non–doorman (5.99%), doorman two–bedrooms (2.36%)

Battery Park City—Doorman one–bedrooms (0.23%), doorman two–bedrooms (5.29%)

Where Prices Increased:

Harlem—Doorman one–bedrooms (0.13%), doorman two–bedrooms (5.03%)

Upper East Side—Doorman studios (1.53%), doorman two–bedrooms (0.57%)

Midtown West—Doorman studios (1.06%), non–doorman one–bedrooms (0.12%)

Midtown East—Non–doorman studios (3.78%), doorman studios (1.96%), doorman one–bedrooms (0.90%), non–doorman two–bedrooms (3.23%)

Chelsea—Non–doorman one–bedrooms (2.63%), doorman one–bedrooms (0.13%), non–doorman two–bedrooms (4.83%)

Gramercy Park—Non–doorman studios (2.24%), non–doorman one–bedrooms (0.43%)

Greenwich Village—Doorman studios (6.06%), doorman one–bedrooms (2.81%), doorman two–bedrooms (0.97%)

East Village—Doorman one–bedrooms (2.71%)

SoHo—Doorman one–bedrooms (2.01%), doorman two–bedrooms (5.24%)

Lower East Side—Doorman studios (5.21%), non–doorman two–bedrooms (5.61%)

TriBeCa—Doorman one–bedrooms (1.96%), doorman two–bedrooms (1.81%)

Financial District—Doorman studios (0.99%), non–doorman one–bedrooms (8.53%), doorman one–bedrooms (1.87%), non–doorman two–bedrooms (7.44%)

Battery Park City—Doorman studios (0.54%)

Tips for Renters:

• Battery Park City tells the story. If you are looking for a picture of the Manhattan rental market, look no further than BPC. Prices in the neighborhood appeared to be steadily increasing through the summer of 2008, but fall brought prices plummeting 11% overall. Battery Park City doorman one–bedrooms are now the third lowest in all of Manhattan, making them an excellent deal.
• The bottom falls out. The Lower East Side is the quintessential example of what happens to a late–comer in a hot market. While developers rushed to finish their projects in the Spring of 2008, hipsters helped to inflate prices on these units. But when the market cooled in the summer, the prices dropped even faster than they rose. Doorman one and two–bedroom units now sit only above Harlem as the second least expensive units in Manhattan – fantastic opportunities for bargain hunters and those looking to be the first in the neighborhood when it turns back around in the next cycle.
• Harlem drops back down. During the peak of the market, Harlem prices increased particularly rapidly as renters were desperate for bargains; however, now that rents are dropping across the board, many Manhattan residents are again looking to more centrally–located ‘hoods. This migration of tenants back downtown has significantly impacted prices in Harlem. Many units are at or near their lowest price points – a trend that we suspect may continue through the downturn.

Mean Manhattan Rental Prices

The Mean Rental Price graphs illustrate average monthly rents for studios, one–bedrooms and two–bedrooms in doorman and non–doorman buildings in Manhattan for the month of January 2009. Graphs tracking citywide and neighborhood price changes over a rolling 13-month period follow.

Manhattan Price Trends

Neighborhood Price Trends

Upper West Side

Upper East Side

Midtown West

Midtown East

Murray Hill

Chelsea

Gramercy Park

Greenwich Village

East Village

SoHo

Lower East Side

TriBeCa

Financial District

Battery Park City

Harlem

The Report Explained

The Manhattan Rental Market Report is the only report that compares fluctuation in the city’s rental data on a monthly basis. It is an essential tool for potential renters seeking transparency in the NYC apartment market and a benchmark for landlords to efficiently and fairly adjust individual property rents in Manhattan.

The Manhattan Rental Market Report is based on data cross-sectioned from over 10,000 currently available listings located below 155th Street and priced under $10,000, with ultra-luxury property omitted to obtain a true monthly rental average. Our data is aggregated from the TREGNY proprietary database and sampled from a specific mid-month point to record current rental rates offered by landlords during that particular month. It is then combined with information from the REBNY Real Estate Listings Source (RLS), OnLine Residential (OLR.com) and R.O.L.E.X. (Real Plus).

Contact us now: 212.475.9000

Note: All market data is collected and compiled by The Real Estate Group’s marketing department and is overseen by C.O.O. Daniel Baum. The information presented here are intended for instructive purposes only and has been gathered from sources deemed reliable, though it may be subject to errors, omissions, changes or withdrawal without notice.

If you would like to republish this report on the web, please be sure to source it as the “Manhattan Rental Market Report” with a link back to its original location (http://www.tregny.com/manhattan_rental_market_report).