NYC retail rents below $700 for first time since 9/11
New York City retail rents have plummeted and ground floor lease availability hit record highs due to the coronavirus outbreak. FOX Business’ Lauren Simonetti with more.
A new report claims that New York City is facing record apartment vacancies, leading to lower rents across multiple boroughs after residents fled the city during the coronavirus pandemic.
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In an effort to combat the spreading virus, New York City enacted a number of measures, most prominently the citywide lockdown and mandate that companies enact broad work-from-home policies. The shift in workplace environment forced many people to reassess their living situations, in many cases leaving the city entirely to return to family homes elsewhere in the country where the cost of living is lower.
The Hartford Courant reported that more than 16,000 New Yorkers switched their residence to Connecticut during the first three months of the pandemic, starting in March. Some movers reported residents swapping the Big Apple for California, Florida, Texas or even North Carolina.
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That drastic shift has resulted in a record 13,117 vacant apartments across Manhattan in July, according to a report by Douglas Elliman and Miller Samuel Real Estate Appraisers & Consultants. The number is a 122% increase over the previous year, which listed 5,912 apartments in July 2019.
New lease signings fell by about 23%, resulting in a drop in median rental prices, from $3,521 in July 2019 to $3,167 last month.
The number of vacancies is the highest in the 14 years the companies have put out the report.
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In Brooklyn and Queens, the numbers are high, though not nearly as staggering: Brooklyn has 3,639 vacancies while Northwest Queens has 648 – the latter representing a 69.2% increase from July 2019 and a 7.5% increase from June to July in 2020.
One tactic that landlords have taken to incentivize new tenants is to offer free months on a lease, usually at the end of a full 12 months, which leads to a reduced net rent. On average, landlords have offered 1.7 months free, the New York Post reported.
“Consistent with the decrease in rental prices, there was a record amount of listing inventory, a rise in landlord concessions, and the vacancy rate jumped for the third consecutive month,” the report noted.
It remains to be seen how many will return now that New York has managed to flatten the curve, but that shift may depend more on telecommuting than any incentive that the city or landlords can offer.
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With major companies like Google and Facebook informing employees that they are exploring the possibility of work-from-home beyond the end of the pandemic, the trend could only increase, which could see the exodus of New York residents continue.
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