6 ms·

We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA. The last offer was 3 months free and 2 parking

by doh 6y ago

We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA. The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking. Other buildings are offering by default two months rent-free and they will pay the movers if you decide to move in. DTLA is a special place as it has plenty of new supply, but I can imagine that it's not too different in other places across LA.

slg 6y ago
For added context and to build off your last point, for years it has been relatively standard for luxury rentals in DTLA to offer somewhere between 4-8 weeks free rent. It might be more appropriate to view this as a single free month with free parking when comparing to other markets.
- doh 6y ago
  Thank you, that's a good context. In the building where we moved in 3 years ago from SF, they didn't offer any free rent at point as they were completely full. However, the larger point stand. Most building did offer around a month of free rent to new tenants in last couple of years.
  - slg 6y ago
    Interesting, I got 4 weeks free when I moved to the area in 2017. Although I am sure there were places that didn't offer that. The closer a place gets to being full, the more important it is to renew leases at the full sticker price rather than reaching 100% occupancy. I know I was able to bargain down my rent during my last lease renewal because the building was still offering free rent to new residents.
    - doh 6y ago
      We renegotiated 3 times a significant discounts as more supply started seeping in. In our last renewal we got 3 months free and 1 parking spot free. Whenever we spoke with neighbors they were so thankful that they didn't increase the price that they immediately signed. In fact of the maybe 20 people we spoke over the years, none attempted to renegotiate their lease. My expectation is as PPP is now running its course a lot of white collar jobs will be terminated which will put pressure on the housing market as whole. I believe we should see a dramatic drop in prices by early next year (nobody really buys/sells during holidays).
      - acidbaseextract 6y ago
        How do you renegotiate? It seems like you need to be willing to walk to have any negotiating leverage, and moving is a pain in the ass.
        doh 6y ago
        That’s correct. I’m ready to move. I found out that the pain is not as bad as it seems and I actually like moving. But even if you don’t like it, there is little to be lost. The worst they can do is to say no and then you pay whatever rate they asked for if you decide to stay. I tend to reside in more expensive buildings so they have harder time finding tenants. That’s why I ask for the costs of finding a new tenant as a discount. This only works in falling market or in market with plentiful of supply. When we lived in SF we paid what they asked for.
        acidbaseextract 6y ago
        > That’s why I ask for the costs of finding a new tenant as a discount. Great stuff. Thank you for the reply!
        lotsofpulp 6y ago
        Finding desirable tenants can sometimes be a pain in the ass too. But being willing to walk away is, of course, the best negotiating position.
        doh 6y ago
        That's right. I tend to negotiate less on the initial lease and negotiate more on its renewal as we prove that we are a valuable tenant (paying on time, low interaction, ...). Even when we lived in SF, where negotiations were almost impossible as they would have filled the unit within a week, they still were willing to do something in order to retain us.
        taylorhou 6y ago
shostack 6y ago
I'm guessing the freebies are to avoid lowering the actual rent due to Prop 13?
- deleted 6y ago
  [deleted]
- doh 6y ago
  If I'm not incorrect this doesn't apply to newer properties. Generally it introduces more complexity in the process so tenants can't easily share and get outraged by different rent levels, because everyone is "paying the same". So if you rent is $3k/month but you don't have to pay for 2 months, you are still going to pay $3k. Additionally once the lease is up you are starting with $3k baseline rather than $2,500.
- gkop 6y ago
  I think you mean rent control, not prop 13. Anyhow this commenter sounds like they know what they're talking about and are saying that landlords in SF cannot beat rent control in this manner: https://socketsite.com/archives/2020/06/complimentary-rent-on-the-rise-in-san-francisco.html#comment-394729 https://socketsite.com/archives/2020/06/complimentary-rent-o...
  - shostack 6y ago
    Ack, you're right, I did!
- hellisothers 6y ago
  The value of commercial (ie 4 or more units) rental property is calculated directly from the rent it can command and you can find yourself upside down on a loan I’d your rent dips too far. This is also why you’ll find places would rather have vacant apartments than lower rent too far.
xur17 6y ago
> The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking. Someone should make a website to share offers that they received like this. It would be super helpful to better understand your local market and negotiate come renewal time.
- doh 6y ago
  Someone should indeed.
wiether 6y ago
> We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA. > The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking. That's weird how everytime I discover something new about "free market" in USA, I'm glad to live in Europe. Having to negotiate your lease like you would with a bag of apples seems insane to me since rents are regulated as are drops or increases in an occurring lease.
- doh 6y ago
  I'm originally from Europe. I do like that I can negotiate better terms than the market, but I also acknowledge that this is not better system for everyone. The benefit of the US system is that higher rents create more incentive to produce more supply. It sometimes breaks down, like it did in SF, but in DTLA this worked well. Developers smelled opportunity, build bunch of new apartment buildings and we were able to lower our rent by 35% just within 14 months. If the market was regulated, then no new supply would be produced as there is no incentive to do so.

by doh 6y ago

slg 6y ago

For added context and to build off your last point, for years it has been relatively standard for luxury rentals in DTLA to offer somewhere between 4-8 weeks free rent. It might be more appropriate to view this as a single free month with free parking when comparing to other markets.

doh 6y ago
Thank you, that's a good context. In the building where we moved in 3 years ago from SF, they didn't offer any free rent at point as they were completely full. However, the larger point stand. Most building did offer around a month of free rent to new tenants in last couple of years.
- slg 6y ago
  Interesting, I got 4 weeks free when I moved to the area in 2017. Although I am sure there were places that didn't offer that. The closer a place gets to being full, the more important it is to renew leases at the full sticker price rather than reaching 100% occupancy. I know I was able to bargain down my rent during my last lease renewal because the building was still offering free rent to new residents.
  - doh 6y ago
    We renegotiated 3 times a significant discounts as more supply started seeping in. In our last renewal we got 3 months free and 1 parking spot free. Whenever we spoke with neighbors they were so thankful that they didn't increase the price that they immediately signed. In fact of the maybe 20 people we spoke over the years, none attempted to renegotiate their lease. My expectation is as PPP is now running its course a lot of white collar jobs will be terminated which will put pressure on the housing market as whole. I believe we should see a dramatic drop in prices by early next year (nobody really buys/sells during holidays).
    - acidbaseextract 6y ago
      How do you renegotiate? It seems like you need to be willing to walk to have any negotiating leverage, and moving is a pain in the ass.
      - doh 6y ago
        That’s correct. I’m ready to move. I found out that the pain is not as bad as it seems and I actually like moving. But even if you don’t like it, there is little to be lost. The worst they can do is to say no and then you pay whatever rate they asked for if you decide to stay. I tend to reside in more expensive buildings so they have harder time finding tenants. That’s why I ask for the costs of finding a new tenant as a discount. This only works in falling market or in market with plentiful of supply. When we lived in SF we paid what they asked for.
        acidbaseextract 6y ago
        > That’s why I ask for the costs of finding a new tenant as a discount. Great stuff. Thank you for the reply!
      - lotsofpulp 6y ago
        Finding desirable tenants can sometimes be a pain in the ass too. But being willing to walk away is, of course, the best negotiating position.
        doh 6y ago
        That's right. I tend to negotiate less on the initial lease and negotiate more on its renewal as we prove that we are a valuable tenant (paying on time, low interaction, ...). Even when we lived in SF, where negotiations were almost impossible as they would have filled the unit within a week, they still were willing to do something in order to retain us.
        taylorhou 6y ago

shostack 6y ago

I'm guessing the freebies are to avoid lowering the actual rent due to Prop 13?

deleted 6y ago
[deleted]
doh 6y ago
If I'm not incorrect this doesn't apply to newer properties. Generally it introduces more complexity in the process so tenants can't easily share and get outraged by different rent levels, because everyone is "paying the same". So if you rent is $3k/month but you don't have to pay for 2 months, you are still going to pay $3k. Additionally once the lease is up you are starting with $3k baseline rather than $2,500.
gkop 6y ago
I think you mean rent control, not prop 13. Anyhow this commenter sounds like they know what they're talking about and are saying that landlords in SF cannot beat rent control in this manner: https://socketsite.com/archives/2020/06/complimentary-rent-on-the-rise-in-san-francisco.html#comment-394729 https://socketsite.com/archives/2020/06/complimentary-rent-o...
- shostack 6y ago
  Ack, you're right, I did!
hellisothers 6y ago
The value of commercial (ie 4 or more units) rental property is calculated directly from the rent it can command and you can find yourself upside down on a loan I’d your rent dips too far. This is also why you’ll find places would rather have vacant apartments than lower rent too far.

xur17 6y ago

> The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking. Someone should make a website to share offers that they received like this. It would be super helpful to better understand your local market and negotiate come renewal time.

doh 6y ago
Someone should indeed.

wiether 6y ago

> We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA. > The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking. That's weird how everytime I discover something new about "free market" in USA, I'm glad to live in Europe. Having to negotiate your lease like you would with a bag of apples seems insane to me since rents are regulated as are drops or increases in an occurring lease.

doh 6y ago
I'm originally from Europe. I do like that I can negotiate better terms than the market, but I also acknowledge that this is not better system for everyone. The benefit of the US system is that higher rents create more incentive to produce more supply. It sometimes breaks down, like it did in SF, but in DTLA this worked well. Developers smelled opportunity, build bunch of new apartment buildings and we were able to lower our rent by 35% just within 14 months. If the market was regulated, then no new supply would be produced as there is no incentive to do so.