I'm not a real estate guy at all so forgive the potentially stupid question.
Here's what I'm trying to figure out:
- I live in NYC
- Pretend Unit A and Unit B are extremely comparable units
- Unit A has lowered its asking gross rent by about 10-20%, so ignores all the Net Effective games they play
- Unit B is asking for a (very slight) increase but will not budge whatsoever on gross rent and won't offer incentives on Net Effective (such as free month, etc.)
- Aside from some of the simpler explanations ("maybe owner of Unit A is more desperate") or something like that, are there any kind of differences in the ownership/financing structures that would incentivize owners to leave units empty versus lower rent? As silly as this may sound, do some structures get to value their units on an "asking gross rent" basis or something like this, versus "average realized rent?" (Again, forgive my lack of knowledge here...)
For example, my building has 5 units. It (appears) to be owned by a fund managed by Castellan. In late 2019, agents told us they were having a hard time filling the building with the current asking prices, but ultimately filled up 5/5 units by about Dec19. Because they've refused to budge on rent, the building now has 2/5 units filled, and they are not listing the others on the market. The building just finished renovations about a year ago... perhaps there's more to do, but that doesn't appear to be the case. Any ideas?
