What’s stunning is that median apartment rents in Manhattan are back to pre-pandemic highs. Rents for apartments with door attendants soared to a new record high while ones without door attendants are still below 2019 levels. Some argue New York City’s most expensive borough is back, but the “back-to-work” barometer tells a different story.
Appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate released a new report Thursday that highlighted median rent in the borough increased 16% to $3,475 in December compared to a year ago. The rents are back to levels last seen right before the pandemic crash.
The overall increase in rents was primarily due to a sizeable increase for apartment buildings with a doorman, which climbed 23% to a staggering $4,298 (a new record high). In comparison, buildings without doorkeepers rose 7.8% to $2,695 (still below 2019 levels).
Jonathan Miller, president of Miller Samuel, said demand for luxury buildings is a prime example of polarization in the market, with prices for apartment buildings without a doorman still lagging pre-pandemic levels.
Rental inventory is tight for luxury buildings as landlords slashed generous concessions. Inventory has plunged 81% from a year ago in December, and the vacancy rate is 1.7%. There was also a 39% plunge in new leases for the month.
Miller said, “the market is coming off of unsustainable activity levels and trending toward more sustainable patterns in the coming months. Omicron is in the mix for sure, just slowing down activity too.”
Meanwhile, Kastle Systems, whose electronic access systems secure thousands of office buildings across NYC, showed only 17% of workers were back at their desks in early January, compared with 37% on Dec. 2. Omicron has certainly impacted back-to-work as employers have recently sent workers home.
Still, the good news is that Morgan Stanley has called the top on Omicron, and it could peak in the next month. So maybe soaring rental demand is workers returning to the city with the hopes the virus pandemic will end this year.