Manhattan Renters – Higher Rents are Here and Concessions Disappear

Phyllis Furman DAILY NEWS BUSINESS WRITER

The good times are over for Manhattan renters.

The power has shifted back to landlords, sending rents up and concessions down during the last three months of 2010, according to a report due out Wednesday by real estate brokerage firm Citi Habitats.

\”The opportunities tenants were being offered during the economic downturn are being taken away,\” said Citi Habitats President Gary Malin.

Average rents jumped across all apartment sizes compared with the end of 2009.

The average price of a studio rose 6.2% to $1,840, while the average rent for a one-bedroom increased 7.2% to $2,512.

Demand for bigger apartments grew, too, with the average rent for a two-bedroom hitting $3,467, up 5.2%.

Three-bedrooms went for $4,690, up 5.7%.

Manhattan rents are still down 9% from the peak reached in spring 2008, but are 7% more than the recent low, reached at the beginning of 2010.

As demand for rentals grows, landlords are pulling back on concessions, such as a month\’s free rent or the payment of a broker\’s fee.

Last month, just 22% of rental deals included a concession, down considerably from December 2009, when 60% of renters won concessions.

Still, some tenants can find deal sweeteners, especially at new rental projects. For instance, the Beatrice, a pricey high-rise at W. 29th St. and Sixth Ave., is offering a month of free rent and payment of the broker\’s fee on a 13-month lease.

Manhattan\’s rental market is strengthening even in the face of high unemployment and economic uncertainty.

\”People still come to New York to start their careers because of the diversity of employment opportunities,\” Malin said.

Some are choosing to rent because tougher lending requirements have made it more difficult to buy apartments or houses. While rents are rising, a recent dip lured tenants who had considered Manhattan too expensive.

With the market becoming tougher for renters, the traditionally low vacancy rate inched higher, hitting 1.21% in the fourth quarter of 2010. That\’s up from just under 1% in the third quarter of last year, but down from 1.79% in the fourth quarter of 2009.

With winter generally a slower time for landlords, rents could ease. \”Things could get more flexible, but we\’re not going back to 2009,\” Malin said.

pfurman@nydailynews.com