Our Founder and Managing Partner Karla Saladino Weighs In on Current Rental Market Costs
The Observer recently asked Mirador Real Estate’s managing partner, Karla Saladino, for her expertise, quoting her about the recent decrease in average Manhattan rents. Many landlords, rather than lower rents, are offering more incentives to entice people to sign. Karla explains that in newer buildings, these incentives are offered not to bring in more rent money, but to bolster rent rolls and fulfill promises made to investors:
Karla Saladino, managing partner with Mirador Real Estate, suggested, however, that outside of a few neighborhoods like Midtown West and Long Island City that have seen a surge of inventory in recent years, landlords are more often using incentives less out of strict necessity than a desire to goose their buildings’ values.
“We are seeing more concessions because the landlords want to hit certain rent rolls, and the secret is out that you can do that with concessions,” she said.
Established landlords with high levels of equity in their building will often cut prices instead of offer incentives, Saladino noted. On the other hand, she said, “In new developments a lot of times [owners] were promising investors certain [rent] levels, so they will incentivize sort of non-stop.”
But wait, who do they think they’re fooling? Surely an investor can do the math and figure out that 12 months at $5,000 isn’t actually $60,000 a year if you’re giving away a month free, right?
“That’s not always disclosed,” Saladino said. “I’ve seen marketing contracts that put incentives into the marketing costs, and sometimes investors look at the marketing costs and don’t realize that’s in there.”
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