By Adam Frisch, Managing Principal, Lee & Associates Residential NYC
The beginning of 2018 has signified a bright new normal for apartment leasing in Manhattan, and the city’s brokers have breathed a collective sigh of relief after the anomalously poor leasing years of 2016 and 2017. Due to an uncertain post-election economy, potential tenants were reluctant to sign new leases during this roughly two-year period. Although the economy has now stabilized and leasing activity has certainly picked up, Manhattan brokers are now faced with a new challenge: competition from outer boroughs.
Thousands of new rental units are coming on the market in both Brooklyn and Queens, and people are flocking to them. According to The Real Deal,in Brooklyn, the number of new leases increased this past January by 42.1 percent and in Queens, the number went up by 43.2 percent. Over the short term, the Manhattan rental market looks very promising and a strong summer for leasing activity is expected. Due to the forthcoming shutdown of the L train as well as the debut of the 2ndAvenue subway line, transportation options will likely benefit those planning to live in Manhattan in the near future.
Over the long term, however, Brooklyn and Queens are here to stay and will most certainly be taking some market share from Manhattan. For many tenants, especially younger ones, Manhattan isn’t as desirable as it might have been at one time. As with most changes, there will likely be an adjustment period as brokers learn to navigate the shifting market. However, it remains to be seen exactly how strategies will change and in turn, what the new normal for leasing will become.