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Manhattan Rents Down 15%, Brooklyn Rents Down 12% As Exodus Continues

8 Spruce St. in Lower Manhattan, also known as New York by Gehry, was developed by Forest City and is now owned by Brookfield.

Monthly apartment data has once again shown the extent of the damage on rents in pricey parts of Manhattan.

The average rent in November in Manhattan was $3,485, according to brokerage MNS Real Estate’s monthly report. That figure represents almost a 2% decrease from October and a whopping 15% from November 2019.

Average rental price decreases year-over-year in the outer boroughs were less severe; Queens' average price fell 4% while Brooklyn is down 12% year-over-year. In the Bronx, where prices started far lower, the average rental was up 3% from last year to hit $2,314 per month.

“Manhattan is the most pricey, so it’s definitely taken the biggest hit,” MNS CEO Andrew Barrocas said. “The upper part of the market has the ability to go to second homes and other states at this time, and then you have your younger millennial demographic that is making a quarter of million dollars and that renter profile doesn’t need to be in the city. They don’t feel it’s necessary to pay a premium to live in a $4,500 one-bedroom.”

Different parts of the boroughs are being affected in different ways, Barrocas said, with some areas seeing massive falls and others holding firm.

On the Upper West Side, rents are down year-over-year by 17% and the East Village prices are down by almost 25%, according to MNS. Chelsea prices have fallen by nearly 18%, while Murray Hill is down by just shy of 20% from last November. By comparison, in SoHo, the average price was down by 7% from last year.

“This is a supply-and-demand issue,” Barrocas said. "If people aren’t required to be in their office they are not going to pay a premium to be in their building in Manhattan."

Offices have reopened but many companies have elected to keep their workers remote as the coronavirus pandemic continues to rage across the country. Nearly 300,000 New York City residents filed change of address requests from March 1 through Oct. 31, according to U.S. Postal Service data obtained by the New York Post. New York City apartment vacancy has soared to record highs this year, with some 16,000 units available in September, per CNBC.

At one of Manhattan's largest rental buildings, New York by Gehry in the Financial District, 200 residents have left, per The Real Deal, and occupancy has fallen by nearly 20%. Multifamily owners in Manhattan have been bracing for difficult market conditions for some time.

“In Manhattan, there is blood on the streets,” Nelson Management Group President Robert Nelson said during Bisnow’s multifamily digital summit in September. “It’s really, really bad in Manhattan.”