Experts have long been warning that Downtown Brooklyn is likely to soon experience a rental glut, and it appears that those predictions are finally starting to become a reality. Several new buildings have brought hundreds of apartments to the rental markets in the past year with more on the horizon for this year. When combining an oversupply with a softening rental market mix, landlords are now finding themselves scrambling to fill some of their apartments.
Landlords Offer Perks to Attract New Renters
A number of large rental towers have recently hit the Downtown Brooklyn market. Among these are the Hub, which is located on Schermerhorn Street and offers 600 market-rate units, and the Ashland boasting nearly 600 units. The large supply of apartment offerings has resulted in developers and brokers who are taking steps to entice renters by offering discounted rents, waiving of broker fees and other perks. Every unit at the Ashland and Two Trees’s 300 Ashland, both of which are located within the Brooklyn Cultural District, are being billed as “no fee” rentals, as are a number of other apartments in Downtown Brooklyn. Others are offering up to two months of free rent to new renters.
A Mixed Message
Interestingly, while landlords are offering perks to new renters, there does still appear to be a great deal of demand for apartments in the area. The Hub, for example, received 80,000 applications for its 150 affordable housing units. These units are priced at $833 per month for a studio, $895 per month for a one-bedroom unit and $1,082 per month for a two-bedroom unit. This seems to indicate that demand is generally still high, but there the slowing demand exists within the market-rate rentals. These units are clearly far more costly, with a market-rate studio at the Hub going for $2,700 per month. This seems to indicate that the issue is more about interested renters simply being unable to afford the cost of rent rather than a general lack of demand.
A Worsening Situation
During a time when landlords are already finding themselves needing to offer special incentives to attract new renters, a number of additional rentals are on the horizon. Among these are a 440-unit tower on Fleet Place being developed by John Catsimatidis and a 700-unit development by TF Cornerstone on Bond Street, with 571 of the units being market rate. While prices have not yet been released for these apartments, there is a good chance that they will face some of the same issues as those developments that have already been completed and hit the market.
Whether or not Downtown Brooklyn is genuinely experiencing a rental glut or not, there is no doubt that there are some great perks being offered by many of the developments in the region. Therefore, for anyone who is interested in moving to Downtown Brooklyn, now appears to be a good time to take advantage of the deals that many of the area’s landlords are currently offering.