April 15, 2016 By Christian Murray
Real estate companies are struggling to command the same lofty rent for luxury Long Island City apartments that they did last year, according to a newly-released report.
The average rent paid for a three-bedroom luxury apartment during the first quarter of 2016 was $5,561, according to the Modern Spaces 1Q16 report. This figure is significantly lower than the $6,053 reported for the first quarter in 2015.
Even the amount levied for smaller apartments was lackluster.
The average rent for a luxury studio apartment was $2,462 during the first quarter of 2016, down from $2,502 for the first quarter of 2015.
The average rent for two-bedroom apartments during the first quarter of 2016 was $4,302, down from $4,436 for the same quarter in 2015.
Luxury one-bedroom units did go up slightly, from $3,126 during the first quarter of 2015 to $3,171 during the first quarter of 2016.
“There is a large supply [of rental units] and a lot more coming so the market will start to plateau,” said Arlinda Dine, executive director of marketing at Modern Spaces. “There are another 20,000 units coming in the next few years.”
She said that the square footage of apartments are getting smaller, which has affected prices.
The Long Island City Partnership reported last week at its annual real estate breakfast that approximately 11,000 residential units have been completed since 2006 and another 22,500 units are to come.
Of the 22,500, about 95 percent will be rentals.
The condo market was mixed on a year-over-year basis.
The average price paid for a one-bedroom condo during the first quarter of 2016 was $813,000, down from $820,000 in the first quarter of 2015. The price per square foot also dipped, dropping from $1,134 in 1Q15 to $1,078 in 1Q16.
But the bigger apartments did better.
Two bedroom condos sold for $1.2 million during 1Q16, up from $1.1 million in 1Q15. Furthermore, the price per square foot came in at $1,116 in 1Q16, up from $1,028 in 1Q15.
Three bedroom condos sold on average for $1.7 million. Modern Spaces did not have 1Q15 data for three-bedroom condos to compare it with.
The condo market remains strong, Dine said. She said that many new buildings—such as The Jackson and LIV@ Murray Park North—have come to market and the contract prices are fetching $1,500 per square foot.
“There is also lot of demand for the bigger apartments such as the two-[bedrooms] and three-[bedrooms],” Dine said. “There are a lot of families in the neighborhood looking for these apartments.”