Expecting to rent around 40 apartments a month – which is a standard rate for large projects in healthy markets – the Dime instead managed four leases a month when it started renting last summer, Mr. Charney.
Although he declined to say whether the Dime would be profitable, Mr Charney is happy that at the beginning of June, after being in the market for months longer than he had expected, his project did not ‘had more than two units at market rate.
âI think the worst is over,â said Charles Morisi, development manager at Spitzer Enterprises, which developed 420 Kent, a three-tower glass complex. When Covid hit, “we had a lot of people coming in and out of town,” resulting in a 20% vacancy, much higher than the typical 2% rate, Mr Morisi said. “It was a little scary.”
But after concessions that included four free months on a 16-month lease, 420 units at Kent’s market rate are now 90% leased, he said, and Mr Morisi recently reduced the incentives to just two. month.
New rentals, which are generally considered to be those built in the past five years, are only a small part of the rental pie, especially in Manhattan, where they account for around eight percent of the market share, albeit at Brooklyn that number is 20 percent, and in Northwest Queens, 29 percent, according to Jonathan Miller, an appraiser.
But because they start with so much vacant homes, they are perhaps the most sensitive to market shocks. And there continues to be shaking. In April, the median price of an apartment in a new development in Manhattan, $ 4,500, was down 10% from the previous year, Miller said. Median prices in Brooklyn and Queens have also fallen, but not by as much, the data shows.