Ticker TOP for 1 MONTH Deal Vol?

David Goldsmith

All Powerful Moderator
Staff member
Landlord group admits there are a lot more vacancies than the official count.
What you won't hear much about is how much NYC Real Estate is being warehoused.
Manhattan by far dominated the neighborhoods with the most vacant units, too. The top 13 neighborhoods in terms of empty apartments were all in the borough, data shows.

From the most recent market reports published (which are mostly based on listings data) it would appear that the concensus on vacancies is around 4%. However landlord groups are crying that the vacancy rate is well over 5% so Rent Stabilization should be abandoned. As a very, very rough cut that would seem to indicate that somewhere over 1% of units are being held off the market vacant on purpose. Again, as a rough number citywide that would be 20,000 units.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
From the most recent market reports published (which are mostly based on listings data) it would appear that the concensus on vacancies is around 4%. However landlord groups are crying that the vacancy rate is well over 5% so Rent Stabilization should be abandoned. As a very, very rough cut that would seem to indicate that somewhere over 1% of units are being held off the market vacant on purpose. Again, as a rough number citywide that would be 20,000 units.
I would think its even higher than that? I recall talking to my friend who runs a small agency, 70+ agents, good rental book mostly in east village, smaller lamdlords, and he says vacancy rates are always well under reported at all times
 

David Goldsmith

All Powerful Moderator
Staff member
In terms of more standard apt buildings, I had been tracking Prism on SE threads because of their relative transparency & reactivity over the past year. Of the 269 units, listings had reached as high as 49 in late 2020. It is now 7:


Looking at the line of 440 sq ft studios I had been keeping an eye on, 2019 to present:

2/8/2019​
#19A
$3,710​
studio1 bath
440​
3/1/2019​
#18A
$3,455​
studio1 bath
440​
4/16/2019​
#12A
$3,270​
studio1 bath
440​
4/20/2019​
#16A
$3,345​
studio1 bath
440​
4/24/2019​
#13A
$3,450​
studio1 bath
440​
6/2/2019​
#8A
$3,450​
studio1 bath
440​
6/16/2019​
#11A
$3,460​
studio1 bath
440​
7/1/2019​
#4A
$3,450​
studio1 bath
440​
7/29/2019​
#9A
$3,615​
studio1 bath
440​
8/10/2019​
#10A
$3,635​
studio1 bath
440​
10/12/2019​
#7A
$3,425​
studio1 bath
440​
11/29/2019​
#9A
$3,300​
studio1 bath
440​
5/7/2020​
#6A
$3,180​
studio1 bath
440​
5/9/2020​
#7A
$3,295​
studio1 bath
440​
7/1/2020​
#13A
$3,065​
studio1 bath
440​
8/21/2020​
#5A
$2,670​
studio1 bath
440​
9/30/2020​
#19A
$3,380​
studio1 bath
440​
10/7/2020​
#18A
$3,345​
studio1 bath
440​
10/12/2020​
#8A
$2,620​
studio1 bath
440​
10/31/2020​
#10A
$2,820​
studio1 bath
440​
10/31/2020​
#2A
$2,515​
studio1 bath
440​
1/21/2021​
#3A
$2,325​
studio1 bath
440​
2/9/2021​
#4A
$2,280​
studio1 bath
440​
2/13/2021​
#10A
$2,370​
studio1 bath
440​
2/16/2021​
#11A
$2,490​
studio1 bath
440​
3/18/2021​
#19A
$2,895​
studio1 bath
440​
4/3/2021​
#14A
$2,625​
studio1 bath
440​
4/15/2021​
#2A
$2,920​
studio1 bath
440​
5/5/2021​
#17A
$3,340​
studio1 bath
440​
5/14/2021​
#16A
$2,995​
studio1 bath
440​
5/26/2021​
#18A
$3,395​
studio1 bath
440​
5/30/2021​
#7A
$3,120​
studio1 bath
440​
6/13/2021​
#6A
$3,430​
studio1 bath
440​

It doesn't seem like they are playing games, but rather maximizing revenue via market pricing. In particular:

  • The lowest-priced apt available now is $6095. If they were warehousing and/or not listing full inventory, why wouldn't they have anything at a lower price?
  • If they were doing serious amounts of warehousing and/or not listing full inventory, why were they showing 49 apts in winter 2020?
  • If they were "holding the line" on higher rents, why would they go from $3635 for 10A in Aug 2019 to $2370 for the same unit in Feb 2021? And then we see $3450 for 8A in Jun 2019 vs. $3430 for 6A in June 2021. 6A spent 16 days on market and was the last sub-$5500 apt listed for over a month now.
I think talk of "continued heavy rental activity into early 2022" will prove wrong, just like "continued heavy sales activity throughout summer" seems to be proving wrong because it's all driven by return-to-NYC-by-Sept demand. But for the moment, it sure seems like it's here. Prism played it smart, and will probably leave the summer at normal-ish near-full vacancy, with existing tenants primed for renewal increases. Those who have been warehousing will be sitting on empty inventory come the fall & winter, with reduced pricing and demand IMO.

In terms of more standard apt buildings, I had been tracking Prism on SE threads because of their relative transparency & reactivity over the past year. Of the 269 units, listings had reached as high as 49 in late 2020. It is now 7:


Looking at the line of 440 sq ft studios I had been keeping an eye on, 2019 to present:

2/8/2019​
#19A
$3,710​
studio1 bath
440​
3/1/2019​
#18A
$3,455​
studio1 bath
440​
4/16/2019​
#12A
$3,270​
studio1 bath
440​
4/20/2019​
#16A
$3,345​
studio1 bath
440​
4/24/2019​
#13A
$3,450​
studio1 bath
440​
6/2/2019​
#8A
$3,450​
studio1 bath
440​
6/16/2019​
#11A
$3,460​
studio1 bath
440​
7/1/2019​
#4A
$3,450​
studio1 bath
440​
7/29/2019​
#9A
$3,615​
studio1 bath
440​
8/10/2019​
#10A
$3,635​
studio1 bath
440​
10/12/2019​
#7A
$3,425​
studio1 bath
440​
11/29/2019​
#9A
$3,300​
studio1 bath
440​
5/7/2020​
#6A
$3,180​
studio1 bath
440​
5/9/2020​
#7A
$3,295​
studio1 bath
440​
7/1/2020​
#13A
$3,065​
studio1 bath
440​
8/21/2020​
#5A
$2,670​
studio1 bath
440​
9/30/2020​
#19A
$3,380​
studio1 bath
440​
10/7/2020​
#18A
$3,345​
studio1 bath
440​
10/12/2020​
#8A
$2,620​
studio1 bath
440​
10/31/2020​
#10A
$2,820​
studio1 bath
440​
10/31/2020​
#2A
$2,515​
studio1 bath
440​
1/21/2021​
#3A
$2,325​
studio1 bath
440​
2/9/2021​
#4A
$2,280​
studio1 bath
440​
2/13/2021​
#10A
$2,370​
studio1 bath
440​
2/16/2021​
#11A
$2,490​
studio1 bath
440​
3/18/2021​
#19A
$2,895​
studio1 bath
440​
4/3/2021​
#14A
$2,625​
studio1 bath
440​
4/15/2021​
#2A
$2,920​
studio1 bath
440​
5/5/2021​
#17A
$3,340​
studio1 bath
440​
5/14/2021​
#16A
$2,995​
studio1 bath
440​
5/26/2021​
#18A
$3,395​
studio1 bath
440​
5/30/2021​
#7A
$3,120​
studio1 bath
440​
6/13/2021​
#6A
$3,430​
studio1 bath
440​

It doesn't seem like they are playing games, but rather maximizing revenue via market pricing. In particular:

  • The lowest-priced apt available now is $6095. If they were warehousing and/or not listing full inventory, why wouldn't they have anything at a lower price?
  • If they were doing serious amounts of warehousing and/or not listing full inventory, why were they showing 49 apts in winter 2020?
  • If they were "holding the line" on higher rents, why would they go from $3635 for 10A in Aug 2019 to $2370 for the same unit in Feb 2021? And then we see $3450 for 8A in Jun 2019 vs. $3430 for 6A in June 2021. 6A spent 16 days on market and was the last sub-$5500 apt listed for over a month now.
I think talk of "continued heavy rental activity into early 2022" will prove wrong, just like "continued heavy sales activity throughout summer" seems to be proving wrong because it's all driven by return-to-NYC-by-Sept demand. But for the moment, it sure seems like it's here. Prism played it smart, and will probably leave the summer at normal-ish near-full vacancy, with existing tenants primed for renewal increases. Those who have been warehousing will be sitting on empty inventory come the fall & winter, with reduced pricing and demand IMO.
Sam Zell is looking to offload Equity Residential Manhattan portfolio. I think that said something about how he perceived future value of NYC Real Estate.
Sam Zell’s EQR wants $750M+ for NYC rental portfolio

REIT is cycling capital into expansion markets​

Fresh off a big-ticket sale of an Upper West Side apartment building, Sam Zell’s Equity Residential is looking to sell a portfolio of Manhattan and Brooklyn rental buildings for north of $750 million.
The Chicago-based REIT put five buildings with a combined 1,180 units up for sale, The Real Deal has learned.

The listing comes as EQR continues to reduce its exposure in New York City and similar markets and deploy the sales proceeds into markets like Atlanta, Denver and Texas.
A representative for Equity Residential did not immediately respond to a request for comment. But on the company’s April earnings call, its chief executive officer, Mark Parrell, said the REIT plans to reduce its holdings in New York and Washington, D.C., so that about a third of its portfolio is in the Northeast.
“We’re going to continue to own a lot in New York, and New York is going to be a terrific market in 2022,” he said. “And then you’ll see our exposure to that market drop over time. And I think, hopefully, that will be well timed with improvements in performance in some of the Sun Belt markets [where] we’re adding exposure.”
He estimated it would take a couple of years to rebalance the portfolio. The REIT had 36 properties in New York spanning nearly 9,350 units at the end of 2021, according to its annual report.

Last year the company spent about as much money on acquisitions — about $1.7 billion — as it got from sales, Pharell said. The 14 properties it sold had an average age of 30 years, while the 17 properties it bought had an average age of 2.
The buildings up for sale are 505 West 54th Street in Midtown West, 400 and 431 West 37th Street in the Hudson Yards area, 500 West 23rd Street in Chelsea and 111 Lawrence Street in Downtown Brooklyn.
The sales pitch describes the properties as well-maintained where a new owner can make a value-add play and raise rents to meet the surging market.
The properties have “below-market rents with above-market care,” according to marketing materials from Eastdil Secured, where a team led by Will Silverman and Gary Phillips is leading the sales effort.
Equity Residential recently struck a deal to sell the 354-unit building at 140 Riverside Boulevard to Douglas Eisenberg’s A&E Real Estate for $266 million, Bloomberg reported.
EQR had put the Chelsea building at 500 West 23rd Street up for sale in 2018 along with nearby 800 Sixth Avenue. The latter sold the next year to Greystar for nearly $240 million; Equity Residential held on to the former.
At the time, pressure from new supply was pushing rents down. But now rents are booming.
Manhattan net effective rents reached their highest levels on record in March, according to Douglas Elliman’s rental report.
 
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