1. 257 Clinton Street for $174 million or $277 a square foot.
2. 1445-1451 Third Avenue for $150.35 million or $732 a square foot.
3. 201-203 East 86th Street for $42.5 million or $165 a square foot.
4. 370-374 Columbus Avenue for $21 million or $675 a square foot.
5. 228-238 East 44th Street for $16.2 million or $120 a square foot.

A new report from investment brokerage Marcus & Millichap declares New York will have the lowest rental apartment vacancy rate in the nation (2.8 percent) by the end of the year, as well as the strongest growth in rents throughout the year.

These dual projections will keep New York, the report says, the tightest, priciest rental apartment market in the United States, ahead of No. 2 Orange County, Calif., and No. 3 Oakland. In fact, New York's the only non-West market to make the report's top 5.

Release on the report after the jump.

- Tom Acitelli

NEW YORK CITY APARTMENT MARKET
RANKS NO. 1 IN NATIONAL INDEX

NEW YORK, Jan. 16, 2007 - New York City gained four positions to claim the #1 spot in the 2007 National Apartment Index (NAI) compiled by Marcus & Millichap Real Estate Investment Brokerage Company. In spite of a minor uptick in vacancy forecast by year end, New York City is still expected to post the lowest overall vacancy rate and strongest rent growth in the nation. The wide affordability gap between owning and renting in New York will help to sustain strong renter demand in spite of above-average rent increases.

The firm's NAI, which is a snapshot analysis that ranks 42 apartment markets based on a series of 12-month forward-looking supply and demand indicators, is featured in Marcus & Millichap's 2007 National Apartment Report. The report states that, with the local economy growing at a healthy pace, rental demand in all boroughs of New York City will increase in 2007. On the development front, construction of new apartment units is projected to rise this year, led by a 50 percent increase in new supply in the borough of Manhattan.

"With a vacancy rate south of 3 percent, New York City will remain the tightest apartment market in the nation," says Mitchell LaBar, a managing director of Marcus & Millichap and regional manager of the firm's Manhattan office. "In this tight market, owners will have the leverage to aggressively raise rents."

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

· Citywide, employers are expected to create 39,000 jobs in 2007, a 1.1 percent increase but down from 50,000 positions added last year.

· Vacancy is projected to increase 10 basis points to 2.8 percent.

· Asking rents are forecast to climb 6.5 percent to $2,719 per month in 2007, following a 6.4 percent jump last year.

· Developers will add approximately 3,200 rental units to New York City this year; 2,700 units are scheduled for delivery in the borough of Manhattan and another 500 units in Brooklyn.

· Last year, the median price of properties in the borough of Manhattan rose 19 percent to $200,000 per unit, and investors remain willing to accept initial returns ranging from 4.5 percent to 5.8 percent.

Orange County, Calif., which ranked #1 in last year's NAI, dropped one position to #2. Oakland, Calif., jumped three spots to rank #3, while Las Vegas (#4) and San Diego (#5) round out the top five. Seattle (#7) and San Francisco (#8) made the strongest gains in this year's index, each climbing eight spots.

For a copy of Marcus & Millichap's National Apartment Report and the complete NAI rankings, visit www.MarcusMillichap.com.

But the hunt’s no worse here than in L.A. or even Boston. Really.

It just seems that way because of the grim news often batted around about the Manhattan rental market, starting first and foremost with news about the market’s obscenely low vacancy rate. That rate, though, is impossible to determine.

First, no one knows how many apartments are available to rent in Manhattan at any time. The borough doesn’t have a true multiple-listings service that shares all listings and would theoretically allow every broker to work off the same leads. This is unlike the much smaller Manhattan sales market, where most listings are shared among brokerages, even without an M.L.S.

Second, no one knows how many condos or co-ops are being rented by their owners at any time. Third, tracking available subleases is very difficult as well, and not something that brokerages normally do.

Right away, then, those wishing to determine Manhattan’s rental vacancy rate are toiling in an uphill battle against incomplete data and an ever-changing market.

Some, though, are willing to undertake this fight.

Citi Habitats, Manhattan’s largest rental brokerage in terms of leasing, publishes a monthly report on the Manhattan rental market that’s often cited by the media. Since this time last year, the rental-market vacancy rate has been below 1 percent, according to Citi Habitats, settling at 0.80 percent in October, the last month for which data were available.

This low vacancy rate is trumpeted by the media soon after each report, sparking an outbreak of woe among recent college graduates, newcomers headed for Manhattan, ex-boyfriends who got the boot—just about any person trying to move to Gotham. (And people do keep coming to Manhattan: The borough’s population rose by an estimated 69,000-plus from 2000 through 2005, according to the Department of City Planning.)

Citi Habitats bases its monthly vacancy rates on an analysis of its internal listings database, which includes 50,000 to 55,000 rental apartments. The analysis includes apartments in Manhattan below Washington Heights. The borough’s northernmost neighborhoods, Inwood and Washington Heights, are not, in fact, included in the analysis, and Harlem was only added this year.

Citi Habitats’ attempt, then, like others, is a statistical best guess, only as thorough as the data—which, by the very nature of the Manhattan rental market, dangle incompletely. For instance, 50,000 to 55,000 apartments may seem like a lot for a survey (and so it is, for a rental survey), but there are at least 25,000 rental buildings in Manhattan, according to the Web research engine PropertyShark.com.

So what is the real rental vacancy rate for Manhattan?

It is low. But it’s not that low. In fact, it’s not … well, who knows what it’s not?

“I don’t think you could ever find out the true rental vacancy rate in Manhattan,” said Daniel Baum, co-founder and C.O.O. of the Real Estate Group New York brokerage, which does rentals throughout Manhattan. “Manhattan’s the only place in the country with no M.L.S. If there’s no true M.L.S., whatever properties you’re aware of are what you’re working on, and therefore you can only project vacancy rates based upon your inventory at hand.”

An executive at another major rental firm told The Lab earlier this month that any vacancy rate for Manhattan “might as well be plus or minus 10 percent.”

This rough estimate might actually make more sense than attempting pinpoint accuracy. A higher rate would place Manhattan more in line with other larger American cities. (Incidentally, the city’s normally tri-annual Housing and Vacancy Survey put the Manhattan rate at 3.8 percent at the end of 2005, nearly unchanged from 3.9 percent in 2002.)

In Los Angeles, the nation’s second-largest city, the rental vacancy rate rests around 3 percent, according to the commercial brokerage Marcus & Millichap; in Chicago, the rate’s around 6 percent. In Boston—like Manhattan, another Northeastern haven for the newly arrived young and restless—the rate’s been about 5 percent since mid-2003.

Marcus & Millichap, which doesn’t broker rentals in New York, estimates Manhattan’s vacancy rate at 2.8 percent now—nearly identical to L.A.’s.

So, if you’re on the apartment hunt in Manhattan, you have as good a chance as a Bostonian or an Angeleno to find one.

At least, that’s the best guess.