The upward trajectory of the Long Island City rental market is beginning to show signs that it is tapering off, with rental prices down in the third quarter compared to the second.
The cool down was also evident on a year-over-year basis with rents up only slightly compared to 3Q 2013, according to a recent report.
Modern Spaces, a LIC-based real estate firm, reported that rental prices for luxury apartments dipped by about 5 percent on average in the third quarter compared to the second. For instance, the rent charged for a luxury studio was $2,369 in 3Q 2014, down from $2,558 in the second quarter (see rental figures below). Meanwhile, the rent for a one bedroom luxury unit dropped from $3,158 to $3,013 over that period.
“The past quarter we are really seeing the rental market stabilizing and leveling out,” said Eric Benaim, the CEO of Modern Spaces, in a statement. “With all the new projects that have come online this year, competition between buildings is becoming increasingly apparent and the prices of rentals in the area have started to adjust.”
This year alone, TF Cornerstone began leasing its sixth and final luxury building – 46-10 Center B lvd—which is comprised of 584 units. Meanwhile, Rockrose announced in August that it had fully leased its 709-unit luxury building called Linc LIC.
Rockrose has started construction on a 50 story mixed-used development at 43-25 Hunter Street, which will include 974 rental units. That should be completed by 2017.
Despite the recent slowdown, on a year-over-year basis luxury rentals were up about 4 percent, according to the report. In 3Q 2013, a luxury studio was renting for $2,320 (compared to $2,369 in 3Q14)—while a luxury one bedroom for $2,901 (compared to $3,013 in 3Q14). Furthermore, a 2 bedroom in 3Q 2013 went for $4,106, while in 3Q 2014 it fetched $4,134.
The big firms such as TF Cornerstone and Rockrose are still not offering much in the way of incentives. It is rare to find one month free rent, although the developers will cover the cost of the brokerage fee.