Expecting to lease about 40 apartments per month — which is a standard rate for larger projects in healthy markets — the Dime instead managed just four leases a month when it started leasing last summer, Mr. Charney said.
Though he declined to say if the Dime would be profitable, Mr. Charney is happy that in early June, after being in the market for months more than he anticipated, his project had just two market-rate units left.
“I think the worst is over,” said Charles Morisi, the head of development at Spitzer Enterprises, which developed 420 Kent, a glassy three-towered complex. When Covid hit, “we had a lot of people pick up and leave town,” resulting in a 20 percent vacancy, far steeper than the typical two percent rate, Mr. Morisi said. “It was a little scary.”
But after concessions that included four free months on a 16-month lease, 420 Kent’s market-rate units are now 90 percent leased, he said, and Mr. Morisi has recently scaled back the incentives to just two months.
New rentals, which are usually considered those built within the last five years, are a somewhat small piece of the rental pie, especially in Manhattan, where they represent about eight percent of market share, though in Brooklyn that number is 20 percent, and in northwest Queens, 29 percent, according to Jonathan Miller, an appraiser.
But because they start with so many vacant units, they are perhaps the most sensitive to market shocks. And there continue to be jolts. In April, the median price of an apartment in a new development in Manhattan, $4,500, was down 10 percent from the previous year, Mr. Miller said. Median prices in Brooklyn and Queens were down too, but not by as much, according to the data.
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