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NYC landlords need to stop waiting for the big pay day and start dropping prices. And that appears to be what’s happening. Commercial landlords apparently are

NYC landlords need to stop waiting for the big pay day and start dropping prices. And that appears to be what’s happening. Commercial landlords apparently are still waiting, hence the empty storefronts, but it seems the residential landlords have finally realized the market needs to correct.

neom 8y ago
I was speaking to the owner of the building I work in (335 Madison) about this, he said because so much is owned by families and paid off, (his included) they can afford to leave them empty vs lower the rent, therefore lowering the property values that are leveraged.
- refurb 8y ago
  Indeed. If you're signing multi-year contracts, losing 12 months of rent can be a smaller hit than signing a contract for a lower price.
- dmoy 8y ago
  Curious - what's the property tax rate? Is there a tax if it's not occupied?
  - sethhochberg 8y ago
    We do not have a vacancy tax, no. There is lots of discussion locally about adding one in some form, for both residential and commercial properties.
- JiNCMG 8y ago
  Yeah I know companies in "Silicon Alley" that have moved to Brooklyn (not Dumbo) because the rent is out of control. Old buildings in 23rd Street go years with minimum repairs and rent hikes just cause the landlord can sit it out. Property Managers are freaking out because they only earn on rent collection.
crag 8y ago
And it's about time too. Prices were just stupid in NYC. Even in Queens and Brooklyn. It needs a long correction.
- notyourday 8y ago
  Not going to happen. You think NYC is overpriced? Look at Philadelphia. Or Boston. Until those prices come down NYC will continue to maintain.
  - sriram_sun 8y ago
    Absolutely right. When less desirable suburbs crash 40-50%, NYC might go down 10-15%. During the worst of the financial crisis, in the west coast, places like Concord lost a lot more value than Cupertino or Palo Alto. Also, in NYC, I suspect the 2nd and 3rd home buyers won't miss their money too much. If you purchased it hoping to rent it out and live on that income, that is a different story however.
DINKDINK 8y ago
>NYC landlords need to stop waiting for the big pay day and start dropping prices. High vacancy symptoms can be caused by suppliers seeking higher surplus than the market will offer, it can also be caused by artificial price floors caused by free-market perversions. E.g. factor in all state-mandated costs contributing to a price floor: no one is going to rent a property for less than its property taxes etc.
- dragonwriter 8y ago
  > no one is going to rent a property for less than its property taxes. If you own it already, not renting it doesn't save you from paying property taxes and renting it even at a lower rate reduced your losses from ownership. The only reason you shouldn't want to do it, then, is that you think that the low rental price will depress future rental prices or create friction that will make you miss an opportunity for a higher-paying tenant, and that expected costs outweighs the present rent—but that's just as possible with rent above the property taxes; the property taxes aren't a special cutoff.

neom 8y ago

I was speaking to the owner of the building I work in (335 Madison) about this, he said because so much is owned by families and paid off, (his included) they can afford to leave them empty vs lower the rent, therefore lowering the property values that are leveraged.

refurb 8y ago
Indeed. If you're signing multi-year contracts, losing 12 months of rent can be a smaller hit than signing a contract for a lower price.
dmoy 8y ago
Curious - what's the property tax rate? Is there a tax if it's not occupied?
- sethhochberg 8y ago
  We do not have a vacancy tax, no. There is lots of discussion locally about adding one in some form, for both residential and commercial properties.
JiNCMG 8y ago
Yeah I know companies in "Silicon Alley" that have moved to Brooklyn (not Dumbo) because the rent is out of control. Old buildings in 23rd Street go years with minimum repairs and rent hikes just cause the landlord can sit it out. Property Managers are freaking out because they only earn on rent collection.

crag 8y ago

And it's about time too. Prices were just stupid in NYC. Even in Queens and Brooklyn. It needs a long correction.

notyourday 8y ago
Not going to happen. You think NYC is overpriced? Look at Philadelphia. Or Boston. Until those prices come down NYC will continue to maintain.
- sriram_sun 8y ago
  Absolutely right. When less desirable suburbs crash 40-50%, NYC might go down 10-15%. During the worst of the financial crisis, in the west coast, places like Concord lost a lot more value than Cupertino or Palo Alto. Also, in NYC, I suspect the 2nd and 3rd home buyers won't miss their money too much. If you purchased it hoping to rent it out and live on that income, that is a different story however.

DINKDINK 8y ago

>NYC landlords need to stop waiting for the big pay day and start dropping prices. High vacancy symptoms can be caused by suppliers seeking higher surplus than the market will offer, it can also be caused by artificial price floors caused by free-market perversions. E.g. factor in all state-mandated costs contributing to a price floor: no one is going to rent a property for less than its property taxes etc.

dragonwriter 8y ago
> no one is going to rent a property for less than its property taxes. If you own it already, not renting it doesn't save you from paying property taxes and renting it even at a lower rate reduced your losses from ownership. The only reason you shouldn't want to do it, then, is that you think that the low rental price will depress future rental prices or create friction that will make you miss an opportunity for a higher-paying tenant, and that expected costs outweighs the present rent—but that's just as possible with rent above the property taxes; the property taxes aren't a special cutoff.