Hey all,

Sorry if I missed a similar thread, but with the Rona hitting everywhere, I notice rent prices have dramatically gone down in the city (and there are lots of deals to be had). My lease is up in March, but I've been considering doing a lease break to switch to an apartment with better value.

Would be very interested in hearing views of some of the RE guys on the NYC market; do you think rent is going to continue to drop on a go-forward, or do you see some degree of market stabilization in the next few Qs?

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Comments (10)

  • Investment Analyst in HF - EquityHedge
Sep 2, 2020 - 8:10pm

Awesome - thanks. Spoke to my building today and they essentially told me that I can assign my lease to someone with no penalty (that is, if I can find someone). That said, I know there's a good amount of inventory on the market and my building (specifically), has comparable units for less.

Appreciate your feedback as it's helpful in me figuring out if it's even worth all the brain damage to find someone to take over my lease, pay for movers, etc. 

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  • VP in PE - LBOs
Sep 2, 2020 - 8:30pm

Big thing to make sure you're noticing is the rent deals being advertised are simply a reduction in the net effective rent, not the gross rent (what you actually pay). Gross rents are being held flat (landlords are usually required to do this), so unless you can negotiate the "free months" upfront or amortized across the entire lease, you're still paying full price every month and you don't see the benefit from these concessions until the end of the lease which is typically where most landlords place the free months. So its not as appealing as a straight rent decline. Some buildings are certainly doing that, but from what ive seen its mostly smaller non-institutional type of building owners, such as a walk up or something. Any huge high rise is following the net rent concession model. Its nefarious advertising really because you might be attracted to the $4,200 gross / $3,000 net offers you're seeing when factoring in 2-3 free months, but dont forget that once renewal time comes your rent then becomes the gross rent. You dont get those free months in perpetuity every time you resign. As such, id imagine if people start snagging up these deals we will see huge turnover in 2021 as people are essentially moving into apartments they cant really afford and they turnover upon renewal. There is so much supply right now this absolutely has to change. Nobody is jumping out of their shoes to move back to Nyc early to pay the same rent as pre-covid and have to wait 1-2 years before receiving your "free months." Maybe you guys are, but I certainly am not. 

  • Investment Analyst in HF - EquityHedge
Sep 2, 2020 - 10:42pm

Solid points - and yeah, a lot of the titles are misleading re: you essentially pay gross (w/a few months free) as opposed to net effective/amortized for your term. I wasn't sure how the free months were structured, but you bring up a great point in that a lot of people are not going to be able to afford their places based on the schedule you outlined if they can't pay amortized net effective (which will likely just kick the can down the road regarding inventory/supply in a year or so).

Sep 3, 2020 - 12:57am

Yeah also keep in mind that "flex 1 besroom" really means it's a studio where you can hang up a partition in the living room to make a "bedroom." A "flex 2 bedroom" is a 1 bedroom apartment with a large living room that can be divided into another bedroom. In all, NYC brokers and landlords tend to be real sleezy. They'll do or say anything to get you to sign on the dotted line. So make sure you understand what you are getting yourself into before doing anything. 

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Sep 3, 2020 - 11:15am

Yes, I just did this 2 months ago in DC not NYC but upgraded to a 2BR. Building was offering 1-1.5 months free for new leases, we asked for the termination/transfer fee to be waived, discounted rent (below listing) and 1.5 month concession. They agreed to everything but the 1.5 month concession (said that was for 24-month leases only) so we got 1-month. Seems to be typical in the market and most major cities (work in MF). They just want to keep people there or get new people in quickly even with discounts and concessions, especially the large buildings/companies. 


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  • Analyst 2 in IB - Restr
Sep 3, 2020 - 12:11pm

Again, not NYC, but just got 2 months free up front (had to go 16 month term) and a $200/mo rent reduction throughout the term in Dallas.  Somewhat surprised, as I didn't think the Class A buildings would be struggling as bad as they are.  Figured there would have been a blood bath in Class B/C (probably is and I'm just not aware).   

Sep 9, 2021 - 12:14am

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