July to August 2009 has been exciting for the Manhattan rental market! The amount of transaction volume has been miraculously high. Landlords everywhere are swamped with renters finally biting at some of the greatest deals in 5 years. Rents have fallen to approximately 2006 levels in Manhattan, but the abundance of no-fee / free rent deals takes net effective rents back to 2004 (sales are a very different story).
The next few months will be truly telling. Will landlords seize on the uptick to reduce concessions, or will the off-peak season scare more managers into marketing incentives. So far, the August data supports both theories. Macklowe Properties and Archstone have abruptly scaled back incentives in Midtown West, as Longacre House on 51st and 8th and Archstone Midtown West both ended the 1 Month OP + 1 Month Free deals. Others such as Rockrose has actually increased their incentives, offering a 1.5 month OP and 2 month free at 2 Gold Street (show up without a broker and you might just get a net effective with 3 or 3.5 months off the gross). Some landlords are carefully managing incentives on a case-by-case basis. Stonehenge recently ended the 1 month OP + 1 month free at Ritz Plaza, but in exchange began offering the deal at Olivia, Stonehenge 56, and 20 Park, among others (not surprisingly, all of the Stonehenge 56 units rented quickly afterwards, with the pace at Olivia brisk as well).
