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.
Want more good news?
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.
Full release below.
APARTMENT VACANCY IN MANHATTAN
EXPECTED TO DROP BELOW TWO PERCENT
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 www.MarcusMillichap.com.