Despite Crisis on Wall St., Apartment Vacancy Rate in New York’s Financial District Remains at a Low 2.8%
- Jan 07, 2009
By Anuradha Kher, Online News EditorNew York–Despite concerns about the health of the economy and the crisis on Wall Street, New York’s Financial District (FiDi) (which ironically includes Wall Street) continued to thrive last year as one of the city’s most popular and fastest evolving neighborhoods for apartment renters, with a majority opting to live in either studio or one-bedroom apartments, according to the FiDi Report, a year-to-year analysis of luxury apartment rental trends in the neighborhood, recently released by Platinum Properties, a New York-based residential brokerage firm.According to the year-end report, which did not incorporate landlord concessions in its rental rate figures, a luxury rental studio in the Financial District averaged $2,453.08 in 2008, a slight jump of 6.69 percent over the previous year’s figure of $2,299.21. Meanwhile, studio apartments with home offices averaged $2,980.63, showing gains of 6.14 percent. One-bedroom and two-bedroom apartments, on the other hand, showed modest rent increases averaging $3,163.93 and $4,419.45, or slight climbs of 3.45 percent and 3.26 percent, respectively.”In 2008, rents were able to remain fairly steady when compared to average rental prices in 2007, due to the fact that incentives offered at many luxury rental buildings in the area were at an all-time high,” says Daniel Hedaya, Platinum’s director of leasing and management, who also researched and prepared The FiDi Report. “This was a year in which many landlords, in order to keep vacancy rates low, were willing to negotiate with renters and offer them between one and three months’ free rent, in addition to other incentives such as waiving the security deposit, owner-paid broker fees, and complimentary moving services.”In addition to concessions, notes Khashy Eyn, Platinum’s president and CEO, downtown’s rent increases can also be attributed to the larger volume of luxury units on the market, as several new and converted rental buildings, including 20 Exchange Place and 95 Wall St., began leasing in 2008.”To keep rents competitive with other popular markets such as Murray Hill, Midtown or the Upper East and West Sides, we’ve seen many landlords and building owners offering more selective amenities from fully-equipped gyms to concierge services, which you’d typically expect from a condominium, not a rental,” he says. In 2008, there was an influx of new development in the FiDi market, which brought over 1,200 units on the market. As a result, FiDi experienced an increase in the average size of rental apartments—the most of which was demonstrated in studio units, which offered almost 10 percent more space than in 2007.The FiDi vacancy rate was 2.28 percent compared to 1.8 percent in 2007.Toward the fourth quarter of 2008, developers and landlords began offering more incentives than the market had seen in the first three quarters, in some cases offering an additional month’s rent for free or short-term leases in order to decrease vacancies.