By Jeffrey Steele, Contributing Writer
New York—Rent growth will continue in both Manhattan and Brooklyn in 2013. That is among findings included in the Year End Manhattan and Brooklyn Rental Reports from real estate brokerage MNS, released in mid-January.
In Manhattan, non-doorman studio apartments scored the largest percentage gain at 5.6 percent, or an average of $107, between late 2011 and late last year. In terms of yearly dollar gains, the biggest increases were seen in non-doorman two-bedroom apartments, which were up $249, or 3.7 percent.
Based on current market data, there is every indication Manhattan will continue to see higher rents in 2013, despite an expansion of available inventory.
Why the strength? “It’s twofold,” Andrew Barrocas, CEO of MNS, tells MHN. “You have a strong job market in Manhattan specifically. Unemployment rates are very indicative of rental rates. As the job market improves, the rental market tightens. Also, we’re an international city. People want to be in Manhattan, particularly given the economic difficulties in Europe. The New York market is where people want to come for opportunity. There are other factors, but you combine these two largest contributing factors, and you have growth.”
In Brooklyn, rents in neighborhoods like Williamsburg and DUMBO surpassed Manhattan rents, MNS divulged. Contributing to sending Brooklyn rental rates to all-time highs was the news-making opening of Barclays Center, home of the National Basketball Association’s Brooklyn Nets, within Atlantic Yards.
Yearly average rents stood at $1,812 for studios, $2,400 for one-bedroom apartments and $3,065 for two-bedroom units. The average rent increase as compared to 2011 was 8.6 percent. Among intriguing sidebars was an average rent increase of 22 percent in the Brooklyn enclaves of Fort Freene and Greenpoint, which lured renters on the basis of their comparative affordability.
MNS has tracked more than 1,500 units coming on the Brooklyn market in 2013, with much of that inventory in downtown Brooklyn or Williamsburg. The inventory pipeline is expected to continue to flow as more growth and development comes to the borough.
Some have gone so far as to report Brooklyn’s rents have grown more expensive than those in Manhattan, resulting in Brooklyn renters leaving for Manhattan. Wrong, Barrocas asserts.
“It’s not that Brooklyn is more expensive than Manhattan,” he says. “But there are pockets in Brooklyn that demand higher rental rates per foot than certain areas of Manhattan. Some renters are moving to Manhattan from Brooklyn for different reasons. They may have a job in Manhattan or in New Jersey, or they may want to be closer to a private school their children are attending.”
Barrocas adds that some observers foresee Brooklyn doubling in population in the next 20 years. “You have creative people like freelancers and fashion industry people there,” he says. “There are a lot of exciting things taking place there. Every day there seems to be another exciting event occurring in Brooklyn.”
Brooklyn has always been special, historic and, in places, moneyed, he says, citing Brooklyn Heights, Carroll Gardens and Cobble Hill in particular. “But it’s now becoming more public, more mainstream,” he says. “There’s a buzz there. And the opening of Barclays Center was a big part of that.”