Snapshots

The gap between starting rents and net-effective rents in Manhattan continue to grow

Historical Manhattan net-effective rents vs. starting rents

October 12, 2020
Historical Manhattan net-effective rents vs. starting rents
 
  • Since 2008, the gap between starting rents and net-effective rents has grown 22 percentage points to a peak of 28 percent as of Q3 2020

  • While starting rents have remained generally level since 2018, the drop of more than 6 percent in net effective rents have kept a growing different between the two metrics

  • This is in part due to rising concession packages which have helped to bring down the total effective cost of a lease

  • In the same time frame, 2008-Q3 2020, tenant improvement allowances have risen nearly 316 percentage points and the number of free months have risen nearly 144 percentage points

  • These trends have been exacerbated in 2020 where landlords have been giving increasingly higher concessions packages to adjust for the unknowability of the current economic situation