Manhattan's empty apartments: New leases plunge 62% in May

Seems like a very bad time for Manhattan real estate. It feels like the tide may finally be starting to go out on it.

Which of the Dakotas are you moving to, OP? North or South? I think rents there have always been reasonable. How poor are you? What's all this got to do with New York?

Maybe if monthly rent plunged 62% some of us could actually afford to live in Manhattan without needing two jobs and three roommates.

Good!

I'm happy that all those greedy chinese and russian pigs who are charging ridiculous amounts for rent, aren't going to be collecting any more.

HA!

I live in Queens and it's bopping. It's the rich assholes who cleared out. Maybe there'll be room for the rest of us now.

I hope the rent drops by 80%. Landlord greed has ruined the city, it would be nice to see it become vital again.

How’s Trump Tower doin’?

Vacancy rates in NY are always like 2%. So even with a 62% increase, that’s still only like 3%. Rents may drop a little - but will never be affordable. I wish.

I would love for Manhattan rents to drop - I'll move back there finally! UNLESS DiBlasio gets rid of the police... if that ends up being the case you couldn't pay me to live there.

During the fracking boom rents got insane in North Dakota. Manhattan prices to live in Williston.

It's odd because it seems some of the asking prices went up.

r2 if you weren't kidding, they meant this Dakota

These are the same landlords that have let their retail spaces on the ground floor sit empty for YEARS rather than lowering the price. So - no, prices aren’t going down.

[Quote]Vacancy rates in NY are always like 2%. So even with a 62% increase, that’s still only like 3%. Rents may drop a little - but will never be affordable. I wish.

Not to be all gloom and doom, but if a significant amount of the NYC population dies off during the next waves of the virus, vacant apartments will be for the pickings for the survivors.

It was a bad mistake for cities to open early and not strictly enforce mask wearing/ social distancing, plus the George Floyd & Breonna Taylor murders (executions) could not have happened at a worse time.

Half of Manhattan has been vacant for a decade or more.

I guess it’s a tax scam.

DeBasio was supposed to fix all that. What a huge failure.

What has and is and will happen in NYC is what will happen to all Democrat-dominated cities over the next decade.

Well, duh. The city was locked down in May. Real estate was reduced to looking at pictures, no walk through. Some of you are too stupid to live.

The funniest part is some of you dumbasses behaving as if rent/coops/condos prices went down 62%.

They didn’t, twats.

[quote] Not to be all gloom and doom, but if a significant amount of the NYC population dies off during the next waves of the virus, vacant apartments will be for the pickings for the survivors.

That’s what they thought at the height of the AIDS epidemic.

Didn’t happen.

R17 has sand in her cooter

[quote]Will we finally be able to afford that tasteful studio in the Dakotas?

1. Every time space comes available in the Dakota, Yoko Ono snaps it up. She uses the studios to store her "art".

2. The Dakota has no rentals. It's purchase only.

3. I've seen the studios in the Dakotas (they used to be maid's quarters) and none have good views. They all overlook shaftways.

Let me ask you this — were there any big sales during the pandemic? Did clothing go on sale for 50, 60, 70% off? Did you get any big bargains on amazon? Now that things are opening up, do yiu see any blowout sales anywhere?

So what makes you think apartments are going down in price.? A “sale” online these days is 10% off, a percentage nobody would ever have attempted to call a “sale” before the Internet. Before the Internet, a sale started at 25% off and quickly dropped to 50% off. Now, y’all go searching for a “big blowout 20% off” coupon.

Keep dreaming of that affordable Manhattan one bedroom.

Everyone thought that after 9/11 rent in the city would become cheap again. Everyone was wrong. There is a long line of stupid people who will pay huge amounts of money to live in Manhattan.

If you get a job as an Investment Banker is it possible to make tons of money, then? And therefore live in Manhattan?

Anecdotal: two apartments sold in my building in NYC and one was rented out and it happened in May.

I should say Manhattan.

Let's frame this question in the light of current events.

The Lincoln Tunnel. The George Washington Bridge. The way BLM activists are tearing stuff down, soon there may not be a way to get in or out of Manhattan.

[quote] Anecdotal: two apartments sold in my building in NYC and one was rented out and it happened in May

It’s a 62% drop, not a 100% drop.

[Quote]That’s what they thought at the height of the AIDS epidemic.

[Quote]Didn’t happen.

Apples & oranges, you can't catch AIDS by having your kid sneeze on you after walking in a protest rally.

Something has to change so that real life people can afford to have a life.

Right?

It wasn't any drop in my building, r27. That was everything on the market in my building.

It’s illegal to show apartments in person. The state has been sending out “testers” to make sure it isn’t happening, and to catch and fine those agents who break the rules and show in person. Several agents at my company have been fined. Up to $10k penalty. Brokerages will advise agents that this is illegal but they are independent contractors and if they show apartments against advice, oh well. Play at your own risk.

A friend of mine in a co-op building said her board is allowing owners to show their apartments by private appointment, but no open houses.

My condo building is not allowing showings.

*shrugs*

[quote] The Lincoln Tunnel. The George Washington Bridge. The way BLM activists are tearing stuff down, soon there may not be a way to get in or out of Manhattan.

Oh help! Help, the crazed black people are coming! They have that jungle mania in their blood. They will be raping the white women in their penthouses & throwing the white men off buildings into the street. Oh help, these strapping black men will be swatting planes from the top of the Empire State Building! We are so sorry we didn’t move to a 4 bedroom, 3 bathroom McMansion on 2 acres in Flyoverstan where there is a Home Depot, Target & Holly Lobby up on the highway when we had the chance!

Actually, r31, it's not. Initially real estate was considered non-essential at first but two weeks later it was deemed essential for private showings but not open houses. REBNY recommended virtual showings but ultimately it came down to what the board would allow You were able to move in and out too as long as the board approved it.

The thing was, where would homeowners go during the showing? Starbucks was take out only.

Take a walk?

R34, a walk, schedule your food shopping... One person in my building just hung out in the emergency staircase

R23, I'm asking the question again — can you afford Manhattan if you are an investment banker or is that unrealistic ?

[quote]I'm asking the question again — can you afford Manhattan if you are an investment banker or is that unrealistic ?

Depends what level banker you are and what bank you are working at. Streeteasy.com will give you an idea of space and prices.

R37, depends on what you want. You can find a nice studio on UES for around $1800. The lower you go in the street numbers, the more expensive the apartmrnts. Some areas like Chelsea, once a gay Mecca, are now out of reach for most because of the luxury development projects, like Hudson Yards and the influx of foreign investors. One bedrooms go for $3,500 - $4,000.

I will return when I can get a 700 dollar a month studio.

R8 you never know. People may move out.

R13 there are HUGE tax advantages to empty retail space so that is the reason. The tax advantages for empty apartments are not so much.

[quote]Oh help! Help, the crazed black people are coming! They have that jungle mania in their blood.

I live in NYC. I've seen more white people in these destructive frenzies. Trust fund kids just tearing shit up so they can brag how they were part of a protest. Most black people are smart enough to stay out of this mess.

Any price cuts on Jayne Wrightsman's Fifth Avenue pad? We just know we'd hit it off with the co-op board!

[quote]Some of you are too stupid to live. The funniest part is some of you dumbasses behaving as if rent/coops/condos prices went down 62%. They didn’t, twats.

I HATE people like R17 SO MUCH.

Are hair salons open again in Manhattan?

[quote] I HATE people like [R17] SO MUCH.

R17 doesn’t care what you think.

A bunch of Chinese folks, Russians and Indians will be occupying Manhattan soon enough. Who else??

Look at that man in scrubs.. what a man

Hair salons are not open in NYC. We are way behind the rest of the country in opening - which is why our cases and deaths are So low and falling.

NY isn't way behind. There are parts of Pennsylvania that haven't fully reopened yet. NYC reopened rather quickly given where it was.

Any Section 8's on Central Park West? A balcony for smoking a plus.

Russians have herd immunity to all diseases. The germiest people on earth.

Rents will go down a bit for a year or two then back creep up. Poors will NEVER be able to afford to live a comfortable life in Manhattan.

I haven’t seen any difference in pricing on Streeteasy. Neither in sales or rental prices. I have been checking prices for several years. My husband & I want to buy a place for retirement, but not yet. We look every month at what’s available in the boroughs, just to keep up.

Well good news is young transplants are fleeing city thanks to covid-19. Bad news (for long term health of NYC economy) is young transplants are fleeing city thanks to covid-19.

These people are leaving and taking with them their talent, energy and industry. I don't care what BLM or whatever equality movement says, their loss is not going to be made up easily.

Young New Yorkers have been fleeing the city for the last few years! Places like Los Angles are getting a major influx of creatives. The problem is you just cant have a city of only millionaires and billionaires. When the average workers cant afford to live there, they turn to greener pastures. It's not the only place in the world to live, and it's really not fab unless you wealthy.

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[quote]NY always comes back up, but what gets me nervous is rising crime.

Well, you wanted New York to go back to the 1970s. You got it.

City populations are stagnant or declining nationwide. Suburbs and exurbs are swelling

re: The Dakota - isn’t that neighbourhood pretty boring?

And what is this building just south of it?

You are out of touch on LA r57. LA has now become very expensive and it is also losing people.

The Chinee are not going to like this...

Remote work is here to stay at least in the tech industry and jobs that don’t require in person presence. Companies realize they can downsize on space and save money this way. Workers now see no reasons to pay high rents if they can work remotely while living in less expensive suburbs. This is happening in SF. The rent here has dropped overnight due to this and the fact that cities are now going to be more crime-ridden. Our mayors in these cities are not going to do anything to protect us, in SF property crimes are not even dealt with. There’s a house a block away that a homeless and mentally ill woman likes to camp outside on the sidewalk. She’s deliberately broken car windows and shit on the property next to the owner’s parked cars. But police doesn’t do anything.

Everything's crazy right now!

Since the Dakota is a co op, I would hazard a guess that they forbid any sublets.........you either can afford it to buy and pass the co op board or you dont live there. They probably dont allow any financing either.

R61

Dakota apartments are at Central Park West and 72nd street, not exactly boring.

R67

No, Dakota Apartments are not an all cash building. Like many Upper West Side co-ops they do allow financing, up to 50%. As for subletting it is possible in any co-op, it just depends upon rules if allowed, how often and for how long.

R61

Building shown directly across street from Dakota Apartments was the old Majestic Hotel. It was torn down in 1930's and property redeveloped into The Majestic apartments (115 Central Park West), which also is a highly desirable address.

Hotel Majestic

Most rentals in NYC are rent control (the tiny minority) or rent stabilized (The vast majority). Landlords will not lower rent because then it resets the bar.

They can only raise rent by so much each year. Instead they may offer a free month's rent or waive a deposit instead.

See:

Also from recent NYT article:

"With so many fewer people in the city and the region just now taking tentative steps toward reopening, many tenants have hoped and believed that landlords, presumably struggling to fill vacancies, would be willing to reduce rents. But those looking to sign or renew leases in the last few months say that while some landlords are grudgingly offering short-term concessions, like a free month of rent, most are unwilling to budge on pre-pandemic pricing and, in some cases, are even increasing rents."

Most landlords will do any and everything possible to avoid lowering actual asking rent. This is for a host of reasons but mainly because it puts them in a bad position later when they want to increase rent. Far better to offer something like one or two free months, or some other sort of non-monetary concession that doesn't affect legal asking rent as recorded on the books.

Manhattan apartment contracts fall more than 80% in May, Florida surges

agents will be able to show apts next week. so sales will increase...many want to sell and some want to buy....

One thing to keep in mind about all this "contracts fell" noise is that thanks to Cuomo's PAUSE order. RE agents couldn't show apartments or homes from mid-March until Monday, June 22 when phase II ends that part of lock down.

People still die, get divorced, start a household, get a new job somewhere else, get a new job and have to move somewhere else, grannies go into nursing homes, people decide to downsize...

People will keep renting places.

Why are we even talking about the Dakota? Everytime space comes available in that building Yoko Ono buys it. She won't stop until she owns the whole building.

[quote]City populations are stagnant or declining nationwide. Suburbs and exurbs are swelling

No they are not, exactly the opposite of what you WANT to believe.

Thank you r69. I liked the Majestic hotel better than the apartments.

Thank you, R80.

Summer is done for; with many things such as cultural institutions, bars and others still shut, there isn't much reason to come into Manhattan.

Then consider even with phase II starting on Monday it could be weeks or even months before many companies bring in full staff, if they ever do. Facebook, Google and other tech companies for a start are allowing large numbers of employees to work from home for foreseeable future.

Some of the largest rental activity from June though early fall are recent college graduates moving to city starting new jobs. That may not be happening in any significant way either.

On other side of things with mortgage rates at near nil, those who had maybe considered moving to suburbs sometime in future might move up those plans.

If they make you work from home, can you claim your rent as a business expense?

Yes, but claiming home office deduction is a minefield.

Hopefully as trend of working from home grows tax code will be simplified to just give a standard sort of deduction.

I looked at an apartment in the Dakota today. It was so odd. The previous tenant had their chest of drawers covering up the linen cabinet.

My cousin works for a major cable station and she was ordered to work from home until Jan. I scoffed at all these jobs being permanently done remotely, but a lot of companies have found that operating costs are cheaper. My friend's husband in Texas, who has always worked partially remotely, is now solely working from home until April.

Until there is a vaccine or something many people are going to simply work from home (by request or assignment) until companies sort out how they will staff and run work places going forward.

[quote]Summer is done for;

Our bars, including our local gay bar are opening up this Sunday. I probably still wont go though. Not for a long time.

Fuck Manhattan.

^ we all decided to!

A buying frenzy is roiling the real estate markets in some of New York’s most pastoral regions. And nowhere is the enthusiasm starker than in the Catskills.

In Sullivan, Ulster, Greene and Delaware Counties, urbanites with the wherewithal to venture beyond the city are snapping up primary and weekend houses, many in what real estate sales agents say is a financial sweet spot from $200,00 to $450,000. They are forging ahead despite the inconveniences and uncertainties of buying in a pandemic (masked, self-directed house tours; cautious lenders; virtual closings).

“It is unlike anything I have ever seen. We’re busier in May than we ever were in the height of the summer, which is our high season in the Catskills,” said Robin Jones, an agent with Country House Realty in Sullivan County. “I’ve been in five bidding wars in the last few weeks.”

I have a few friends in NYC and LA and all of them are planning to leave, not for suburbs but for smaller affordable cities. No American city will ever compare to New York, but New Yorkers seem to be completely unaware that the rest of US cities are changing pretty quickly (NYC no longer has a monopoly on Michelin star restaurants, art, and cultural diversity, in fact, it’s just a dull corporate theme park now). The ability to work from home will accelerate this because, contrary to popular belief, most Millennials only put up with the sky high city rent because abundant, well paying jobs could only be found in big cities here.

"I looked at an apartment in the Dakota today."

No! Mine!

[Quote](NYC no longer has a monopoly on Michelin star restaurants, art, and cultural diversity, in fact, it’s just a dull corporate theme park now).

Sure, Jan.

😝😝😝😝😝😝😝

Pre virus, a few friends were priced out and left NYC.

During the virus, a friend on fb left for FL. He said he's tired of struggling.

many are unemployed, I wonder what's gonna happen when the unemployment checks run out...

Dakota is passee, the Sherry Netherland is better.

R95

When PUA ends on 31 July think you are going to see more stuff hit fan economy wise in NYC. Few if any can live on UI in NYS (max is only about $504) alone, so that extra $600 has allowed many to keep some semblance of normal life.

Even with phase II starting tomorrow large portions of NYC economy are still shut down, and may be so well into new year. Broadway, Lincoln Center, Carnegie Hall , performing arts for instance are all shut until January or February 2021 for instance.

Then you have fact many self-employed, freelancers, contract employees simply have had their businesses upended and may not see work return either until new year either. Long as travel bans are in place NYC hotels are solely reliant on domestic travelers which just isn't enough. Many hotels have closed, and more are planning to once their PPP loan terms are satisfied, and or runs out.

Two friends that own beauty shops are thinking of not reopening. Their spaces are just too small for redesining to meet new covid-19 spacing mandates. This and those rules will effectively reduce what they can earn per square foot. Right now they are getting UI and PUA, but once that is over they are seriously considering bailing out of NYC period.

Landlords received a huge windfall the past few years. Rent rolls increasing 50-100% without having to spend a penny. Thyme have tons of money. Which is part of the the reason for all those vacant storefronts for years. Landlords will sit on the apartments for a year and wait it out.

I have 2 friends who left after 25+ years - a waiter and a hotel worker. Probably another 2-3 in next few months. Service sector is decimated for the remainder of the year. But in a year - with a vaccine or the end of the wave - people will forget about it and go back to normal. Just like they did after the 1918 flu that killed more people - including lots of children. We have short empties for bad things.

Only market rate residential rents saw increases, that they make up a very small amount of NYC housing market. Nearly 60% to almost 70% of NYC housing market is rent regulated, public housing, vouchers, subsidized or otherwise controlled by federal, state or local government; those rents have barely budged in past seven years.

R94 = Circa 1980

Here you go JAN. There are thousands of Miichelin star restaurants around the world. New York is nothing special. A quick search show at least 40 restaurants just in Los Angeles.

There are Michelin restaurants in Las Vegas. Damned if I would ever live in Las Vegas. That goes for LA too. LA is a toilet bowl. At least NY still attracts the best and the brightest from all over the planet.

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Victoria's Secret also recently filed a lawsuit in an attempt to get out of a lease at its New York Herald Square branch.

The NBA is being sued by a Manhattan landlord for failing to pay $1.2million in rent in April and May for its flagship Fifth Ave store. The league says the claim is meritless.

NBA Media Ventures, LLC is required to pay $625,000 of its $7.5 million annual fee on the first day of each month under teams of its lease with 535-545 FEE LLC. Counting other fees such as water, the owners are seeking more than $1.2million.

The realism in this thread is depressing. Although I only read a little, so maybe some people got all thrilled at the return of one of their treasured fantasies, like I just did. Living in NEW YORK CITY! Liza Minelli everywhere, the festival of St. Genarro (sp?), walking by Rao’s and knowing I’ll NEVER get in. Road tripping upstate, going out to Long Island, film festivals, voting for Cuomo. Where does the fabulousness end? Never!

Liza Minnelli everywhere?

How old are you?

Good news -Mayor De Blasio announces rent freeze for people in rent stablized apartments.

r96

That is pure class

R91 That can lead to a revival of the Borsch Belt, with their famous entertainers, hotels featuring all you can eat, etc.

Are they hiring tummlers?

[quote]I have a few friends in NYC and LA and all of them are planning to leave, not for suburbs but for smaller affordable cities. No American city will ever compare to New York, but New Yorkers seem to be completely unaware that the rest of US cities are changing pretty quickly

This, definitely. Mid-tier American cities are no longer the backwater shitholes they used to be. Many mid-tier cities in the US now have a large professional class and tons of options, and they're pretty liberal. You're a white-collar professional who likes living the lifestyle of an urban professional? You're gay and you want to live in a city where nobody gives a shit that you're gay? You can have that in Cincinnati, Tampa, Austin, Portland, and more than a dozen other cities now. You don't have to live in LA or NY or SF to have that kind of life anymore. And it's a LOT cheaper.

When the main objection to a place is it’s too expensive, it just means it’s too popular and there are lots of jobs. There is a worldwide issue with the concentration of wealth that is most clearly seen in global cities like NY - or LA. The extreme expense excludes people - it’s the new reality of every major global city. Fact of life. Now the question is where do low income creatives move? Or is there such a thing as a true creative class anymore? Creativity for beauty and art may have been killed by capitalism. All creativity is channeled into capitalism - whether it’s a social media presence or a new idea for an app. Painting, sculpture, writing and even music may no longer be viable or economically sustainable.

R101, NYC no longer attracts the best and brightest (it’s beyond stupid to pay rent that high). It attracts the RICH and UBER RICH.

NYC attracts foreign trash with money to burn who contribute nothing to the city's culture, and asshole rich kids living off their parents who are insufferable cunts.

R42

That god damn lie continues to circulate despite time and time again proven incorrect.

There is no, zero, nil, zilch, nada, benefit tax (federal or local) to leaving retail space empty in NY or anywhere else for that matter.

You cannot deduct nothing from a nothing. If space is not bringing in revenue but owner still has ongoing costs (debt service, insurance, utilities, etc...) how in god's name is there any tax advantage to leaving a space empty.

Most ground floor or other commercial retail space is part of a larger property. So owner still receives rents from either other commercial tenants or residential. In cases where ground floor retail is owned by a co-op or condo then they simply must make do without that income. If things get bad enough assessments or other fees may have to increase on shareholders or owners to make up short fall in revenue.

R113, not true...

[Quote]When I asked the bookseller why the three-floor, 10,920 square foot store closed, he said, "Huge rent hike."

[Quote]"I'm glad the landlord has at least lost tons of money from their greed," I told my Manhattan accountant recently.

[Quote]But he told me they aren't.

[Quote]"These big real estate companies hold out for higher rents to increase the worth of their properties because value is based on future income stream," said Peter Metz, Manhattan CPA. "They can afford to forego current rental income, waiting for higher-paying tenants because they claim big business losses. Landlords get a tax loss from negative rental income when no rent comes in, which cushions their lack of cash flow."

Ok, you do realize there are huge differences between a "loss", "deduction" and "credit" as it relates to income taxes.

Leaving a rental property vacant for long periods of time is not a tax strategy any sane accountant would recommend.

Secondly as have already pointed out there is a world of difference between a small LL with one or few properties, versus great portfolios held by New York's real estate royalty (LeFrak, Friedman, etc......) . Those in turn differ from a condo or co-op building with ground floor retail.

Without knowing who owns property in question it isn't possible to gauge their motives (if any) for keeping space vacant.

Rest of your post is mostly true, but common sense.

Commercial/retail leases in NYC generally start at ten (10) years minimum but can go up to 15 or more. Thus a LL is going to be very picky who he leases space to in order to weed out potential problems down the road. LLs want to see a rock solid business plan, finances and credit.

Also:

R115/ r116, give it up already.

My fantasies mix all time(S) together, R105. Some parts of the fantasy include paying calls in the afternoon and riding to them in a coach pulled by horses.

In other parts, Al Pacino and I lunch together and when I bellow “HOOrah!,“ he laughs and laughs. New York is timeless. I eat at every deli in the city daily and I remain slim and limber. I have even LEFT the city occasionally because I know it’s eternal.

[quote]At least NY still attracts the best and the brightest from all over the planet.

LMFAO. Ring, Ring, Hello, it's the 1980's calling, we want our self aggrandizing back. Now we know where Trump gets it from.

[quote]At least NY still attracts the best and the brightest from all over the planet.

Not anymore. NY attracts foreign scumbags who want to park their ill-gotten money, and asshole trust fund cunts. The real talent and creativity has moved elsewhere, for the most part.

[quote]When the main objection to a place is it’s too expensive, it just means it’s too popular and there are lots of jobs. There is a worldwide issue with the concentration of wealth that is most clearly seen in global cities like NY - or LA.

Wrong! Places like NY and London attract the super rich and foreign investors not lots of jobs. There are lots of empty million dollar apartment and empty storefronts. That's why people are moving out. LA has a huge creative community around entertainment, advertising, movies, film, theater, digital studios, fashion so it does create jobs which is why they are building high-rise condos like crazy right now. Plus it's spread out so it's more affordable if you are willing to commute vs a place like NY where everyone wants to live in the city making rents sky high for the price of being able to walk to work, which is a luxury.