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Demand for Multi-Housing Properties in New York City to Grow Along with Job Market in 2015

Monday, May 18, 2015

The New York multi-housing buildings and apartment market bounced back from 2013 to post a rent growth of 4.1 percent in 2014. Employers in the metro area added more than 100,000 jobs in 2014, supported by the professional and business services sector. 

That 1.9-percent job growth rate was an increase from 1.7 percent in 2013. Employment and Population TotalsDemand for multi-housing buildings for sale in New York City has increased, as more jobs have been added to the market. Single-family and condo prices remain high in the metro area, keeping households in the renter category.

Axiometrics noted, “New York is a major part of what looks to be a resurgent Northeast apartment market. The rise of Brooklyn as a trendy area to live and a hotbed of new jobs is fueling development in that borough, and Manhattan landlords can push rents because people just want to live there.”

New York City Multi-Housing Development

Though much of the initial new development was focused in Manhattan in the early part of the recession, developers have begun turning their attention to the other boroughs. Brooklyn is an attractive option for renters who cannot afford Manhattan rents, and developers seem to have noticed. Axiometrics has identified 2,000 additional apartment units to deliver in Brooklyn in 2015, highlighting growing demand for multi-housing buildings. Many of the other boroughs – especially Queens – will see additional development activity as availability of space and affordability will push developers further out. Axiometrics forecasts an additional 17,900 apartment units for delivery in 2015.

Multi-Housing Building Occupancy and Absorption

Occupancy ticked up 20 basis points (bps) in 2013 from 96.9 percent to 97.1 percent in 2014. A traditionally high multi-housing building occupancy market was bolstered by a demand level that almost doubled in 2014. Expansion of high-paying jobs in the tech sector and other industries have helped create additional demand for apartments as new young renters who had previously been priced out are now entering the market.

New York City Occupancy New York City Completion and Net Absorption

 

Rental Rates for Multi-Housing Buildings

New York had 4.1-percent rent growth in 2014, a significant improvement from the -0.2 percent in 2013. Rent levels continue to be among the highest in the nation, but affordability is not expected to be a concern during the short-term outlook due to stable job growth. With increased absorption in 2014 and expected stable fundamentals in 2015, landlords are gearing up to increase rent once again by 3 percent in 2015.

New York City Rental RatesNew York City Annual Rental Rate Growth 

Contact HFF New York City for more information regarding multi-housing properties on the market in this area.





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