Dear Renters of NYC – please read this from Wall Street Journal:

At least three major Manhattan landlords have decided to stop paying broker’s fees on some rental properties, signaling that many tenants need to brace themselves for extra expenses when apartment shopping.

This is a shift from last year, when landlords—desperate to fill empty units—would cover the broker’s fee, typically a month’s rent.

But with demand for rentals rising and vacancy rates falling, some of the city’s biggest landlords have notified brokers that they will no longer pick up the fee. That, of course, means renters must pay up.

“The pendulum is swinging back to a landlord’s market,” said Gary Malin, president of brokerage Citi Habitats. “Owners are going to do what’s in their power to stop overpaying, in their eyes, to attract clientele.”

In a recent email, Ogden CAP Properties LLC said it won’t pay fees at several properties, including Normandie Court on East 95th Street and One Lincoln Plaza on West 64th Street. It declined to comment.

Pan Am Equities Inc., another large apartment owner, intends to stop paying the fee on June 1, according to brokers. Pan Am declined to comment.

The rental unit of Related Cos., which has about 5,000 units across Manhattan, will stop paying the fee May 31. “There has been a serious uptick in the market. We have seen across-the-board a strengthening in the marketplace,” said Daria Salusbury, a Related senior vice president. Related’s vacancy of less than 1%—down from about 3.5% a year ago—”is better than projected,” she said.

Vacancies are low across Manhattan, which is in its peak leasing season.

April’s rate came in at 1.23%, the lowest since June 2008, according to Citi Habitats. That was down from 1.38% in March and 2.28% a year ago. The average rent for studios and one-bedrooms – which make up most local rental stock – rose 2% from March to $1,799 and $2,390, respectively. Studio rents haven’t been this high since December, 2008. Two bedrooms saw a slight rise to $3,299, from $3,289. Related is modestly increasing monthly rent in Chelsea and downtown, Ms. Salusbury said.

AvalonBay Communities Inc. in most cases is no longer paying the fee for leases in its seven New York City communities—including four in Manhattan.

The company, with 6,900 apartments in New York and New Jersey, says the Big Apple’s improvement is being felt in suburban markets: Many of its communities in New Jersey, Westchester County and Long Island, typically not big broker fee markets, have seen rental increases in recent months.

“Regionwide, market conditions have improved over a year ago,” said John Christie, senior director of investor relations and research.

To be sure, some local landlords continue to cough up the fee. The LeFrak Organization, which owns about 2,500 Manhattan rentals, pays the broker fee in buildings with several units available or with larger apartments, which rent for more and can take longer to fill.

Still, LeFrak’s occupancy is about 99% currently, meaning it’s unlikely to have to pay out much in broker fees.

“The fee is something that comes and goes based on supply and demand,” said Jamie LeFrak, a company principal. “If it makes reasonable sense to pay brokerage commissions, we’d always prefer not to cut out the broker. Keep the brokers happy because that’s who brings you customers.”

Not surprisingly there’s some consumer resistance to renters having to pay the broker fee. Some prospective tenants won’t look at properties if they are responsible for the fee.

http://online.wsj.com/article/SB10001424052748704113504575264863146900120.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth

In case you have not heard:

Vacancy rates at rental apartments in Manhattan continued to decline in April, encouraging landlords to begin pulling back on tenant concessions, according to the latest monthly data by residential brokerage Citi Habitats.

The residential rental market has been improving since November, when vacancy rates began to decline. Last month, the vacancy rate hit 1.23%, down from 1.38% in March, according to the city’s largest rental brokerage.

“We are just unbelievably busy. Transaction volume is strong,” said Gary Malin, president of Citi Habitats, which rented more than 1,150 apartments in April, up a whopping 21% from the previous month. “Now that the market has been absorbing apartments, landlords are removing incentives.”

The first of those tenant concessions that are going by the boards is months of free rent. The good news, though, is that landlords are still paying for broker commissions, Mr. Malin said.

“Landlords are gradually taking away incentives to avoid tenant shock,” he added.

In another sign that the market is improving, landlords are standing firm on asking rents. In fact, average rents began to increase at the beginning of this year when one-bedroom apartment rents rose 1% in January from the previous month. In February, average apartment rents were up from the previous month for studios and two-bedrooms as well. That trend continued last month; average rent for studios was $1,799 and rent for one-bedrooms was $2,299, each up 2% from March. There was no change for two-and three-bedroom apartments.

In some pockets of Manhattan, however, tenants still hold the upper hand and can negotiate rents. In less-desirable neighborhoods, such as east of Third Avenue, which is farther from the subway, landlords are likely to be more flexible, according to Mr. Malin. These Manhattan areas are taking longer to recover in terms of rents, he added. In April, the Upper East Side and Midtown East recorded the highest vacancy rates in the city with 1.59% and 1.70%, respectively.

In more desirable neighborhoods like the West Village, Mr. Malin said he is seeing heated competition for apartments. In some cases, tenants are agreeing to pay $25 to $55 more a month to get an apartment.

http://www.crainsnewyork.com/article/20100521/REAL_ESTATE/100529961

In the past 24 hours, our research was cited by the following media outlets, among others:

Manhattan Apartment Renters Winning Price Cuts From Landlords – BLOOMBERG NEWS

Small Talk: Sun, Rent, Celebrities – THE NEW YORK TIMES

Manhattan Apartment Rents Edge Up In 1Q – CRAIN’S NEW YORK BUSINESS

Manhattan Apartment Renters Winning Price Cuts From Landlords –BUSINESSWEEK.COM

Economy Still Stinks, But Rents Are on the Way Up – THE VILLAGE VOICE

Peace and Stability for the Manhattan Rental Market? – CURBED.COM

Manhattan Rents Drop, Vacancy Rate Increases in 2009: Annual Report – THE REAL DEAL

 Manhattan Rental Market Shows Signs of Recovery – THE REAL DEAL

CITI HABITATS’ AGENTS KNOW NYC REAL ESTATE.
Share the 2009 Black & White Report and our Q1 2010 Rental Market Report with landlords and clients.

New Real Estate Application for iPhone Featuring New York Times Real Estate Content and Search on the Go

NEW YORK, Mar 23, 2010 (BUSINESS WIRE) — NYTimes.com announced today the launch of its redesigned Real Estate section(www.nytimes.com/realestate) with enhanced search functionality and more comprehensive market data. The new search bar now offers filters for Price Reductions, New (Last 7 Days) and For Sale By Owner.

To complement the redesigned site, The Times has launched a new Real Estate application for iPhone, integrating key information and features of the Web site while giving users the ability to seamlessly view saved listings and searches while on the go. iPhone app users can locate properties nearby using the GPS function; view search results on a map and get directions; and personalize listings directly from the app by uploading private notes and photos.

“These search enhancements and data will provide prospective buyers with the tools they need to make sense of a complicated market and get the best property for their money,” said Denise Warren, senior vice president and chief advertising officer, The New York Times Media Group and general manager, NYTimes.com. “By combining our search technology with our deep and timely listings, we are creating a better experience for our users and advertisers online and on our mobile products.”

The launch of the Real Estate iPhone app is sponsored by Sotheby’s International Realty Affiliates LLC; Rose Associates, Inc; TF Cornerstone; Brown Harris Stevens; and Halstead Property, LLC.

Online, The Times now offers data for New York City recorded sales and current New York City market snapshot indicators such as total inventory, median price and more – each of which can be sorted by bedroom count and neighborhood.

New personalization features have been added to the My Real Estate section including the ability to save favorite properties, add private notes and photos, and manage e-mail alerts to track open houses and price changes.

The New York Times Real Estate iPhone app is available for download free from iTunes athttp://itunes.apple.com/us/app/nytimesrealestate/id337316535?mt=8.

Learn more about all of the new and innovative Real Estate features at http://www.nytimes.com/REFeatures.

NYTimes.com continues to reach a large, educated and affluent audience. It is the most visited newspaper site in the U.S. with an audience of 20 million unique users (February 2010 – Nielsen Online). The Times had 85 million mobile page views in February 2010 (according to internal data).

The New York Times Company, a leading media company with 2009 revenues of $2.4 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers and more than 50 Web sites, including NYTimes.com,Boston.com and About.com. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.

This press release can be downloaded from

SOURCE: The New York Times Company

The New York Times Company
Stacy Green, 212-556-7078
green@nytimes.com
or
Kristin Mason, 212-556-4059
masonkm@nytimes.com