No Vacancy! Manhattan Apartment Market Tightest This Decade

A moment of silence for the apartment hunters, please. 
By the end of the year, vacancy rates for apartments in Manhattan will dip below 2 percent, according to a new report from Marcus & Millichap, an investment-sales firm that doesn’t broker rentals in the city. This would be the lowest vacancy rate since 2000’s 1.2 percent.
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Along with the lower vacancy rates come higher rents. According to the report, an increase in demand will result in a 7 percent increase in asking rents to $3,673 per month, and a 7.2 percent increase in effective rents to $3,575 per month.
Hoboken, anyone?
Full release below.




NEW YORK CITY, June 11, 2007 – An increase in rental demand generated by a strong local economy will result in lower vacancy and much higher rents in Manhattan this year, according to a first-quarter Apartment Research Report by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm. The vacancy rate is expected to below 2 percent by the end of 2007, the lowest year-ending reading since 2000, when vacancy hit 1.2 percent.

“All of the borough’s submarkets continue to perform well, though momentum-oriented investors seem to be focusing more on assets downtown these days,” states Edward Jordan, regional manager of Marcus & Millichap’s Manhattan office. “However, buyers that fail to consider investment options in other submarkets could be passing up solid opportunities to put money into assets that continue to appreciate at a significant pace.”

Following are some of the most significant aspects of the Manhattan Apartment Research Report:

· One year after employers created 29,500 positions, job growth will increase to 41,500 new hires in 2007, a 1.8 percent increase.

· Approximately 2,000 rental units are slated to come online in Manhattan this year, compared with 1,040 units in 2006.

· Renter demand generated by a strong local economy will offset an increase in construction, yielding a 20 basis point decline in the vacancy rate to a scant 1.9 percent this year.

· Strong demand will support a 7 percent rise in asking rents in Manhattan to $3,673 per month, and a 7.2 percent increase in effective rents to $3,575 per month.

· Driven by robust fundamentals and difficulties in ground-up development investors’ appetite in Manhattan will remain intense.

For a copy of the Manhattan Apartment Research Report, as well as reports on other markets nationwide, visit our website at