Thursday, August 31, 2017

Rents Flat since 2016, Residential Sales Up but Lower Price Point, Office Rents Up

Some real estate agents have acknowledged there has been a slow down in rents in the city - a blurb by the New York City Economic Development  Corp (NYCEDC) quoted local companies showing rents staying practically flat against June 2016.

Landlords should adjust their expectations.  Don't look at the highest rents advertised and price your unit there just because... there are fewer people looking around and they start at the bottom of the scale, not the top.  

In addition, don't over renovate (ie, choose all the most expensive materials), but do fit in amenities that are important for living (so, marble - out; dishwasher - in). 

When I started in the business in 2005, it was more common for Manhattan units not to have any dishwashers.  They were the domain of doorman "luxury" buildings.  But frankly, more and more new arrivals in New York expect dishwashers - or set their sights on one.  More than one renter has said "I can't live without" or, more telling: "I know I can't have everything I want, but dishwasher is one thing I am willing to pay for."

As I deal in the older parts of the city, I have this conversation with sometimes generational owners who don't see the value in adding dishwashers, and importantly, might not have the infrastructure needed (mainly, a waste pipe that's wide enough to handle it).  We have to have the tough conversation as to whether it makes sense to open a wall on every floor to replace that often corroded infrastructure with something new.  It will last for decades, but that doesn't mean it's not a messy, expensive job.

As we head into what I think will be an extended flat patch for rents, and as NYC's buildings continue to age, more and more landlords will have to do this calculus with their budget.

If you want to talk about this or any other maintenance issue, please feel free to contact me.

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