Need a Renter? Try Giving Away Free iPads and Bicycles

Prospective buyers playing hard-to-get? How about sweetening the deal with an iPad? Some developers and brokers are turning to quirky giveaways, hoping the extra incentives will help fill buildings during this tough economy. The freebies, often tacked on to traditional incentives such as fee eliminations or coverage of certain taxes, are the latest trend in attention-getting promotions.

In one online ad, a broker with Platinum Properties offered to throw in two custom suits worth $2,000 each with the keys to a penthouse apartment. The broker could not be reached to say if the penthouse had been rented.

Last month, Alchemy Properties gave away iPads and 42-inch high-definition televisions to anyone who signed a contract to buy units at the Griffin Court Condominium in Midtown. More than 150 people stopped by the property during the promotion's first two weeks, said the president of Alchemy, Kenneth Horn.

"It's definitely generating enthusiasm and helping people come into the building," Horn said.

In March, brokers with aptsandlofts.com gave out the iPod Touch to renters at 60 Monitor Street in Williamsburg. They also offered free Huffy cruiser bicycles to anyone renting an apartment at 150 Johnson Avenue, also in Williamsburg.

"The idea was simply to touch base with our market, to give them something different, something interesting but specific to them," said David Maundrell, the brokerage firm's president. "We didn't just want to give things away for the sake of it."

Innovative incentives can also cut costs for developers with bare-bones advertising budgets, thanks to the word-of-mouth response they generate.

"We paid about $4,000 for the bikes, a fraction of what we might have paid for a one-shot print ad in the major papers," Maundrell said. "We were able to catch people's attention without blowing our budget."

Renters and buyers aren't the only ones taking note -- brokers are also scoring giveaways, a practice that has become an industry norm.

Brokers who brought the buyers to the Griffin Court Condominiums were rewarded with gadgets; one broker went home with three flat-screen TVs, Horn said.

Looking to generate interest in Harlem's 5th on the Park condo, the Griffin Real Estate Group raffled five iPads to brokers during two parties last month. The developer was looking to attract brokers as part of the building's latest marketing push.

But the latest hot item can be tomorrow's cold throwaway, meaning the hunt is on for novel incentives to offer buyers in upcoming promotions.

"I wouldn't offer an iPad in six months," said Carole Griffin, Griffin Real Estate Group's director of sales. "But I'm sure there'll be something that's appealing, that'll give us a little extra 'oomph.'"

2010: The Year of the Renter?

SCORES of stalled construction projects can be found scattered around New York City, but one category of building that doesn’t seem to have been sidetracked by the recession is the luxury apartment rental.

Some of the new buildings that will add at least 7,000 apartments to the city’s housing stock.

At least 16 new rental buildings are expected to open in Manhattan in coming months, ranging from small buildings to 500-unit high-rises, for a total of more than 3,500 apartments. Brooklyn will get an additional 3,500 new apartments as well, including units in some buildings that opened in late 2009.

While 7,000 new apartments is a relatively small number for a city where 70 percent of 8 million residents live in rentals, many of the new buildings are concentrated in just three neighborhoods: Manhattan’s Hudson Yards area, downtown Brooklyn and Williamsburg.

These apartments are becoming available at a time when average rents are down by about 25 percent from the market’s height in early 2008; vacancy is close to 2 percent, compared with just under 1 percent in 2007 and 2006; and the city is still losing jobs. As a result, the new buildings are offering a range of incentives to lure tenants, including one to five months of free rent, free gym memberships, American Express gift cards and even free iPods.

The new buildings, with all their enticements, will most likely set off another round of apartment musical chairs — first seen in 2009 — in which many renters with leases coming up will try to move to fancier buildings or better deals.

Rents have already dropped to the levels they reached in 2000, and the influx of apartments is expected to keep them there. New studios in the Hudson Yards area could start at $2,000.

“The opening of new buildings is really going to be the keynote of 2010,” said David J. Wine, a vice chairman at the Related Companies, which owns and manages about 5,000 rental units in New York City, but does not have a building opening this year. He said that Manhattan had not had to absorb this many new market-rate apartments in more than a decade.

But after the surge of new buildings in 2010, Mr. Wine and other rental developers said, rental construction in the city will hit a lull. “After these buildings are completed, there’s going to be nothing, because banks stopped financing,” he said, referring to the credit crunch that started in late 2008 and has hit developers and home buyers equally hard.

“Nothing” may be a slight exaggeration, since Related hopes to open a new building on 10th Avenue and 42nd Street in 2011 and has eventual plans to build some 5,000 units directly over the Hudson Yards.

But Robert Scaglion, the managing director of residential marketing for Rose Associates, thinks the “nothing” assessment is about right. “This is going to be the end of all the rental developments that were planned three to five years ago,” he said. “And after this group hits the market, there’s not going to be much else.”

Rose is managing two Williamsburg buildings that are to open soon — 184 Kent, a 338-unit converted warehouse, and 34 Berry, a 140-unit building.

As developers work to fill their new buildings in 2010, Frederick S. Harris, a senior vice president for development at AvalonBay Communities, said that “you almost by definition have to have a pause.”

Avalon just opened Avalon Fort Greene, a 630-unit unit building that is actually in downtown Brooklyn.

“We will be delivering Avalon Fort Greene through most of this year because it’s such a large building,” Mr. Harris said. “And this will be our last delivery for a while.”

Avalon has plans for another rental tower in West Chelsea but is not likely to break ground there until next year.

Although new buildings will open throughout the city in the coming months, the largest concentration will be in neighborhoods that developers had pegged as the latest frontiers.

In the Hudson Yards area, which is bounded by 30th Street, 42nd Street, Eighth Avenue and the Hudson River, four large projects have started or will soon start leasing apartments: Silver Towers, two 60-story glass towers with nearly 1,000 market-rate apartments built by Silverstein Properties; Emerald Green, a 569-unit project developed by Glenwood Management; Ohm, a 288-unit building from Douglaston Development; and 505 West 37th Street, two towers with 835 units developed by TF Cornerstone.

The number of new apartments expected for downtown Brooklyn in 2010 is no less extensive: the 650 units at Avalon Fort Greene; 365 units at 80 Dekalb, a 36-story tower built by Forest City Ratner; 512 units at Brooklyn Gold, a project of Lalezarian Developers; and 491 units at the Brooklyner, a 51-story tower from the Clarett Group.

Developers and brokers say that rental activity has been strong at buildings that opened in late 2009. But some community leaders are skeptical.

Andrew Berman, a member of the Hudson Yards Community Advisory Committee, said, “The market is simply not there for them, and the only way they’re filling apartments is by doing things that they never intended to do, just to get tenants.”

The neighborhood, Mr. Berman said, is “not equipped to handle this flood of product.” He pointed to “insane traffic, lack of public schools and lack of an affordable, full-service supermarket.”

Mr. Harris of Avalon said that while it would have been much easier to fill buildings in a stronger economy, he did not see the surge of new units in downtown Brooklyn as a problem.

“Having four buildings come on line at the same time can be a good thing when you’re in an emerging neighborhood,” he said. “People won’t think: ‘Why is this guy here? Did he make a big mistake?’ ”

Instead, he said, there’s “a sense that the neighborhood is really changing.”

The new buildings have amenities meant to appeal to 20- and 30-somethings — swimming pools, expansive gyms, screening rooms, large roof decks, game rooms with pool tables or arcade games. For incentives, landlords are paying brokers’ fees and offering one or two months’ free rent on 14-month leases, and as much as five free months on two-year leases.

Developers generally have already reduced their original projected monthly rents by a minimum of 10 percent. But the sales pitch often revolves around “net effective rent,” which takes free rent into account to bring the number down further. That could mean net rent for a studio starting at $2,000 in the Hudson Yards area and about $1,400 in downtown Brooklyn. The average rent for Manhattan studios in the last quarter of 2009 was $2,253, according to Prudential Douglas Elliman.

“Everybody is competitive in terms of giving incentives,” said Clifford Finn, the managing director of new development marketing for Citi Habitats, “but with everybody giving about the same, it puts you back in an apples-to-apples comparison, so it comes back down to location and the actual product.”

As for free iPods, offered to people who signed leases at 60 Monitor Street, a 60-unit building in Williamsburg, they were attention-grabbers pure and simple. “Differentiating yourself is half the battle,” said David Maundrell, the president of aptsandlofts.com, which has the listing. Other incentives included a month of free rent and no broker’s fee.

“Once you get them in the door, they still come prepared to negotiate,” Mr. Maundrell said. “If there’s one or two months free, people are asking for $50 off on top of that, and in a rollout, we try to look at every deal and we’ll consider it.”

The carefully baited hooks are apparently working. The northern tower of Emerald Green offered one to two months’ free rent and was 80 percent rented in the three months between Labor Day and Christmas, a traditionally slow time of year. The same offer at the much larger Silver Towers resulted in the leasing of about 400 apartments, or 40 percent, since it opened last May.

The promotions at new buildings will undoubtedly also help keep prices down elsewhere in the city. Marc Lewis, the president of Century 21 NY Metro, estimated that rents had dropped to 2000-era levels. He said they were not likely to climb anytime soon.

“Landlords don’t want to publicize it,” he said. “But if something is listed at $2,100, a tenant will offer $1,900 and maybe they’ll settle on $2,000, with possibly a free month thrown in, plus the landlord pays the commission.”

Still, Chris Albanese, a principal of the Albanese Organization, which has rental towers in Chelsea and Battery Park City, said he didn’t think the new inventory would directly compete with his buildings.

“Are some people coming in and saying, ‘I can get two months’ free rent and the rent is only $2,200 over there’? Of course,” he said. “But we’re not going to drop from $3,200 to $2,200. You can’t walk into a Honda dealership and walk out with a Mercedes. And most people know there’s a difference between a prime neighborhood and a secondary one.”

Mr. Finn of Citi Habitats says the people attracted to the new developments include renters trading up from no-doorman buildings or walk-ups in the city. But he also says the new tenants are New Jersey or Queens residents who previously felt priced out of Manhattan. He said that the percentage of renters coming from outside Manhattan had increased to 30 percent from 20 percent in the last year.

But until new jobs are created to bring in a new pool of renters, it will continue to be a renter’s market, said Marisa DiNatale, a director at Moody’s Economy.com. “You won’t see pricing power for landlords return until there’s a strong recovery of the economy,” she said.

By most accounts, New York’s employment outlook is better than initial predictions, but recession-generated job loss is still not expected to stop until mid-2010. The New York City Independent Budget Office has scaled back the anticipated job loss to 157,200, from 254,500, and predicts employment will start growing again this summer.

“But some sectors, such as finance, we don’t think are going to turn positive again until 2012,” said Douglas Turetsky, the budget office’s chief of staff. “So even though we’re going to start seeing new jobs in sectors like leisure and hospitality, what those jobs pay may not quite match the rent levels for the new buildings that are coming on line.”

Brokers and analysts have long predicted that many of the stalled construction projects around the city are condo buildings that will eventually be converted to rental buildings. But so far, few buildings have taken this step.

Mr. Scaglion of Rose said that 184 Kent was intended to be a condominium, but that the developer, JMH Development, decided to make it a rental during construction when it became clear that condos in the area were not selling well.

Still, Mr. Scaglion said, condo buildings for the most part are not easily turned into rentals because they have “high-end finishes that don’t wear well with rental tenants, and there’s usually no back of house, no shop or staff to fix and renovate apartments.”

Nor do most condo developers want to become rental owners; they would rather renegotiate their construction loans so that they can cut prices and sell out their projects.

Stephen Kotler, a director of rentals for Prudential Douglas Elliman, said that many developers of stalled projects had avoided foreclosure only because they had been able to keep current on their construction loans by spending “interest reserves” negotiated as part of their initial loan packages. “But a lot of those reserves are going to start running out midyear,” he said. “And that’s when you’re going to see more condo projects becoming rentals.”

Some investors are betting that the wind will continue to blow in a renterly direction. A venture called Condominium Recovery was recently formed to buy distressed condo projects and rent them out for a minimum of three to four years before selling them as rental buildings.

Jonathan J. Miller, the president of the appraisal firm Miller Samuel and a partner in Condominium Recovery, says that the plan is to introduce about 2,500 new rental units to market starting in 2011. That is just a fraction of the city’s estimated 22,000 “shadow” condo units: unfinished apartments in stalled buildings, or completed units not yet listed for sale.

But if other companies also convert condos into rentals, Mr. Miller said, the new inventory could “continue to press rental prices down.” Even so, he said, “the three- to four-year outlook for New York City rentals for developers is still probably more favorable than the outlook for luxury condos.”

Move-In Day Is Not Carved in Stone

CONSTRUCTION delays are part and parcel of any new development, so it should come as no surprise that if you’re signing a lease in a brand-new rental building, a firm move-in date can be elusive.

Developers sometimes lease apartments before they have received final permits from the city. So if a building is still under construction, potential renters should ask whether the unit they hope to move into has a certificate of occupancy. If it doesn’t, they should be prepared for delays.

At Brooklyn Gold, some renters were told that they could move in on Dec. 1, 2009, but that date has moved several times; the first move-in is now scheduled for Feb. 1. And at Avalon Fort Greene, move-in dates for about a dozen people were delayed by about a week late last year. Both buildings have compensated renters who were inconvenienced.

Frederick S. Harris, a senior vice president for development at AvalonBay Communities, says that apartments are leased about a month in advance of the anticipated receipt of building department approval.

“We had to push back the first group of people because the certificate of occupancy was later than predicted,” Mr. Harris said. “We try very hard to time it right, but when you’re leasing in advance, sometimes you get it wrong.”

Market Reports: Pileup on Brooklyn-Queens Expressway

Brooklyn Waterfront Construction

Following in the footsteps of Manhattan, the Brooklyn and Queens real estate markets also posted price declines and huge drops in sales during the first quarter of 2009—but much like the boroughs themselves—they didn't completely follow in the big island's footsteps. Today the Prudential Douglas Elliman/Miller Samuel Brooklyn and Queens market reports were released (available for download here), and there are some juicy findings:

1) Brooklyn: The median sales price in Brooklyn was $474,600 during the first quarter, a 9.9% drop from the previous year's median mark of $527,000. Interestingly, the decline was consistent across all property types (whereas Manhattan resales took a huge dip, while new-development closings actually went up in price thanks to cushy contracts negotiated forever ago). Unfortunately, like Manhattan, the number of sales took a nosedive—down 57% to 1,186. In North Brooklyn, which includes Williamsburg, the median sales price dipped 4.5%. Condos made up 84.5% of all sales in that area. The allegedly invincible Brownstone Brooklyn took a 9.4% hit in its median sales price, which decreased to $1,087,500.

2) Queens

: The median sales price fell 4.8% from last year's $413,000 to $393,000, with similar declines by property type but different peaks and valleys based by region.

Northwest Queens, which includes Long Island City, saw nearly a 16% increase in its median sales price

(to $549,428) thanks to a large amount of new development (new units accounted for 47% of all sales in the area for the quarter). Sales declined 52.2% to 1,801, while inventory surprisingly dropped 7% to 10,421 units. The co-op marker saw the smallest decline in median sales price across the borough, with less than a 1% drop.

All eyes on rentals now

From the February issue: New York City has always been a town of renters. But in the last few years, it was easy to forget that fact, with condo towers selling out in a matter of days and the average price of a Manhattan apartment peaking at a record $1.7 million in the first quarter of 2008, according to Prudential Douglas Elliman. For a time, everyone wanted to own New York real estate, and every broker wanted to sell it. Now that the ensuing wave of job losses has made buying property impossible for many New Yorkers, rentals are suddenly back in vogue. "I wouldn't want to be selling condos now," said Richard LeFrak, the chairman, president and CEO of the LeFrak Organization, one of the biggest rental landlords in the New York City area. LeFrak will soon begin marketing a new 33-story rental tower in Jersey City called Aquablu. Occupancy is set for May or June.

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Repricing accelerates for Manhattan office market

Number of blocks of space in Midtown with dramatic rent cuts quadruples

Asking rent reductions that accelerated through the fourth quarter of 2008 continued in January, with prices down by as much as 30 percent from the peak last summer, commercial brokers said.

The number of blocks of space in Midtown with dramatic price cuts quadrupled between September and December, according to a CB Richard Ellis report released last month.

Tenant representative broker Norman Bobrow said he saw repricing all over Manhattan. "This has been going on since September of last year but has accelerated, really accelerated, in December and January," he said. He estimated prices had fallen back to levels last seen in 2005.

The optimism from the inauguration of President Barack Obama on Jan. 20 was quickly dampened two days later by a crushing jobs report that showed the city shed 8,500 private jobs in December and the unemployment rate rose to 7.4 percent, Glenn Markman, executive director at Cushman & Wakefield, said. Each office job loss equates to a loss in demand for about 250 square feet.

Despite the bad news, leasing negotiations have picked up from the near standstill in the fourth quarter of 2008.

"The market had to reduce [prices] because it was too expensive," said Markman, who estimated prices were off 20 to 30 percent from last year's highs.

As an example, he said, in late January he was negotiating a lease with a landlord in a Midtown building who had been seeking as much as $80 per square foot. The tenant occupies the space on a sublease, paying about $50 per foot. But as the economy declined, the landlord reconsidered its high price and will likely settle for about $55 per square foot, or a 31 percent cut from the asking price.

"Look what the landlord gets: certainty," Markman said. "He does not give [tenant improvement] or free rent ... and no downtime for leasing."

Howard Rosenblum, a leasing agent and director at commercial property landlord Kaufman Organization, said owners were aggressively cutting prices by about 20 to 25 percent to attract tenants. But, he said, tenants were still holding off.

"A lot of people are thinking it is going to drop more and don't want to commit," he said. Tenants do not want to pay the steep security deposit and some wonder if they will still be in business in the coming years.

But some tenants who do negotiate are signing leases with prices that are below the rents they paid in the final years of a long-term lease, he said.

Neal Lerner, an independent tenant representative broker who works in the 5,000-to-15,000-square-foot range, said tenants willing to sign leases were opting for shorter terms, like two, three or five years. The bet is that rents will be even lower on the expiration of the lease, and they will get a better deal at that time.

"People tend to stay in place and negotiate shorter commitments from landlords," he said. "They are waiting for a better time when they can take advantage of lower rentals on a long-term basis."

Midtown

Landlords in Midtown have tripled the amount of space aggressively discounted in their hunt for tenants, slashing prices in December by an average of 19 percent, CBRE reported. The quantity of sites being repriced quadrupled from 30 in October to 134 in December, representing 1.74 million square feet that month, the report said.

Despite the steep reductions, the average asking rents dropped by only $1.98 to $78.89 in December, and vacancies rose 1 point to 7.6 percent, the data said.

Some landlords were holding firm in pricing. Bobrow said there were Class A landlords in Midtown who were reluctant to sign leases at discounts. The building owners sought to maintain the high rents in the office towers so that larger tenants negotiating a lease renewal could not point to lower rents and ask for a similar discount.

Landlords "don't want to inch down, they want to hold on to the renewals" at the high prices, he said.

Midtown South

Midtown South had its slowest month in leasing velocity since May 2001. Just 80,000 square feet was signed, representing only 20 percent of the five-year rolling average, CBRE said. The anemic month capped the weakest year since 1993. In 2008, 2.58 million square feet was leased, a level 40 percent below the total for 2007, the data showed.

The district saw vacancies rise in December by 1 point over the month earlier to 8 percent, but asking rents remained steady, dropping just $0.03 to $52.43 per square foot.

Downtown

Leasing activity Downtown remained flat while prices declined moderately, in the only one of the three office markets to see positive absorption, the CBRE data showed.

The district had a net absorption of 270,000 square feet, but for the full year the area had a negative absorption of 1.59 million square feet, compared to a positive absorption of 1.33 million square feet in 2007, according to CBRE.

Average asking rents fell from November to December by $1.51 per square foot to $47.68 per foot, while vacancy rates were steady at 7.4 percent.

Markman said brokers were keeping a close eye on three financial firms that occupy 7.5 million square feet downtown — Bank of America, Goldman Sachs and American International Group.

Bank of America is absorbing Merrill Lynch, Goldman Sachs is moving to a new headquarters in 2010 and AIG may sell some of its buildings for residential use.

"Depending on what the companies look like a year from now, that will have an effect on the marketplace," he said.

With incentives, rents are down 10 to 15%

IN this painful economic climate of layoffs and shrinking investments, there is a sliver of positive news: it’s a good time to be a renter in New York City. Prices are falling, primarily in Manhattan, and concessions like a month of free rent are widespread.

Amy Baglan and Johnny Muñoz negotiated the rent.

Although it is notoriously difficult to quantify the state of the rental market, rents fell in almost every sector of the Manhattan market last year, according to the Real Estate Group, a New York brokerage. The steepest drop was in one-bedrooms, down 5.7 percent in buildings with doormen and 6.53 percent in buildings without. The only category that rose: rents for two-bedroom apartments in doorman buildings, up just a bit, by 0.61 percent. But these numbers, like most available data, represent asking rents rather than the final price. Anecdotal evidence suggests that some people are negotiating rents as much as 20 percent lower than the original prices asked by landlords. These figures also leave out incentives, like a month of free rent or a landlord’s paying the broker fee, which can add up to real savings.

Fritz Frigan, executive director of sales and leasing at Halstead Property estimates that when these incentives are considered, rents are actually down some 10 percent to 15 percent since the market peak in mid-2007.

“In that really strong market,” Mr. Frigan said, “landlords didn’t have to do anything.” In 2008, that was no longer the case.

In January 2008, Halstead had about 90 listings for which the owner offered to pay the broker’s fee. By the summer, that number had pushed upward, hitting about 450 a month.

“Then, in September or October, the whole thing broke loose,” Mr. Frigan said.

In a one-month period, from Dec. 23, 2008, to Jan. 23, 2009, some 1,700 of Halstead’s 9,000 total rental listings included owner payment of the broker’s fee.

Jimmi Circosta, a vice president and associate broker at Citi Habitats, also saw a big slowdown in the autumn, which he pegs to the collapse of Lehman Brothers in September. “Once that news hit the marketplace,” he said, “it just got really quiet.”

Tom Botts and his wife, Libbie Rice, found all kinds of deals from landlords when they went apartment hunting this winter, and they were able to negotiate a reduction in the rent on the Upper West Side three-bedroom that they finally chose. They also encountered a symptom of the market that was simply unheard of in recent years: their previous landlord offered to lower their rent if they renewed their lease.

“We had a truly un-New York experience with our old landlord begging us to stay,” Mr. Botts, 39, said in an e-mail message. The owner offered a rent reduction of more than 10 percent, but the couple had already found an apartment they preferred and were committed to moving.

It’s impossible to say how often owners are lowering rents to encourage tenants to stay put, but anecdotes are starting to surface. “It’s not a common occurrence,” said Mr. Circosta of Citi Habitats, “but it is happening.”

Mr. Botts, a partner at Hudson Crossing, a travel industry advisory company, and Ms. Rice, 44, who does similar work as an independent consultant, hope one day to buy an apartment for themselves and their children, Tommy, 4, and Camille, 2. But they have decided to hold off for now. “The economy feels too scary,” Ms. Rice said.

They have a lot of company on the sidelines of the sale market.

“It certainly makes renting more attractive when the rental market softens,” said Gary H. Schatsky, a financial adviser in New York. “If people suspect — as most people do — that the New York City sales market will get much softer, and they’re able to rent in the meantime, then being able to negotiate a rental rate puts you in a better position.”

Teresa Hsiao found a kinder-than-expected rental market when she moved to Manhattan from Los Angeles last month.

“I was expecting to live in a box,” she said. She looked at more than 10 apartments and found lots of concessions on nice spaces that added up to substantial price cuts. “Everyone was paying the broker fee,” she said. “They were very flexible on their lease terms. One broker told me: ‘We’ll get it done for you. Just name your price and we’ll do it.’ ”

Ms. Hsiao, 23, and her roommate, David Liu, 24, settled on a two-bedroom two-bathroom apartment in Midtown on the West Side. It was listed for $4,200. They offered $3,650 a month and were accepted. After one month free and a $2,000 signing bonus, the total came to $3,215 monthly, and they did not have to pay the broker’s fee.

“This apartment was definitely a great find and a bargain compared to 1.5 years ago,” Mr. Liu wrote in an e-mail message. “It’s definitely a renters’ market now.”

The creation of jobs is one of the primary ingredients in a strong rental market, and people like Ms. Hsiao and Mr. Liu, who both moved to New York for work, used to be its lifeblood. Now their numbers are dwindling as the city has begun to shed jobs.

Libbie Rice and her husband also negotiated their rent.

According to the New York State Department of Labor, New York City lost 49,100 private-sector jobs from December 2007 to December 2008, which helped send the unemployment rate from 5.1 percent to 7.4 percent.

“People assume when sale slows down, rental will pick up, but that depends on what the source of this is,” said Gregory J. Heym, the chief economist at Terra Holdings, which owns Halstead and Brown Harris Stevens. “When you’re losing jobs, the rental market is also going to suffer.”

While prices have started to slide in Manhattan, they are steadier in Brooklyn. Increasingly, however, there are deals to be found, especially in neighborhoods like Williamsburg that have seen a lot of new construction.

Last July, James McGuinness, 23, and his partner, Louis Kerscher, 25, moved into an apartment in Windsor Terrace, Brooklyn, for which the owner paid the broker’s fee. Adrian Cardona, a broker with the company they used, Rapid Realty, says he has seen more owner payments since the summer. “Absolutely,” he said. “They have no choice.”

Patrick McGrath, a managing partner at Taurus, which owns a recently converted luxury prewar rental building in Brooklyn Heights called the Standish, says the Brooklyn market has softened, but not a lot.

“We’re not renting as fast as we would have expected,” Mr. McGrath said. “We’ve had to provide concessions — a free month rent, we pay the broker fee. But rents are around where we expected them to be. We’re in the ballpark.”

Owners with more property — and deep pockets — generally would rather offer incentives than reduce rents because when the market comes back, they start from a stronger bargaining position. But landlords of smaller buildings tend to just lower the rent.

Allison Gill and Hadley Hege, both 22, found that they had some bargaining power when they went apartment hunting late last year. Ms. Gill, a law student, and Ms. Hege, an actress, looked at a two-bedroom apartment in a three-unit building in Cobble Hill, Brooklyn, listed for $2,000. They took it for $1,900.

The rental market in Queens, meanwhile, is relatively stable.

“The prices are not going up,” said Donna Reardon, Queens divisional manager for Prudential Douglas Elliman. “They’re staying the same.” Concessions are still an exception rather than the rule in that borough.

It is in Manhattan, which saw steep price gains in recent years, where the discounts can be substantial now — even on the higher end.

Sara Nuttall, her husband and their 11-year-old twins relocated to New York at the end of last year from Dakar, Senegal, where they paid $2,500 for a five-bedroom house with a garden. They were looking for a three-bedroom apartment and started with a budget of about $6,000 a month.

Senad Ahmetovic, an associate broker and vice president at Halstead, showed them about 35 apartments.

“In my 10 years’ experience, I haven’t seen so many three-bedroom apartments on the market,” Mr. Ahmetovic said. “It just seemed endless. In the past, they weren’t being offered with incentives, because there were so few available at any given point.”

That, it seems, is no longer the case.

“We started to discover that there were incentives there for us,” said Ms. Nuttall, 52. “That made a big difference. It meant we could get something that was a bit nicer, a bit more what we wanted for the same price.”

They eventually settled on a three- bedroom three-and-a-half bath apartment in east Midtown. It was listed for $8,500 but they were able to negotiate the rent to $8,000 a month. They also received a free month of rent, and the owner paid the broker’s fee. Their monthly payment will be $7,400. That $1,100 decline represents a 13 percent decrease from the asking rent, not including the money saved on the broker.

Ms. Nuttall found the apartment in December, always a slow time in the rental market. But seasonal sluggishness does not explain the discounts that she encountered.

“In any last quarter, the rental market always adjusts — vacancies rise and prices dip, every year,” said Gary Malin, the president of Citi Habitats. “This year there was substantially less activity than you would normally see. There was an extra layer of pressure on the rental market — and the world at large — that forced prices down further and vacancy rates higher.”

Some landlords hope that adjusting leases to expire in summer 2010 will get a better price next time around.

Amy Baglan, 26, and her boyfriend, Johnny Muñoz, 28, found a one-bedroom apartment in a prewar building on the Upper West Side at the end of last year. They negotiated a cut of $200 per month in the rent and received a free month. (They connected with the owner on Craigslist and did not use a broker.) But they signed a 16-month lease, which will expire at the end of April 2010.

Mr. Muñoz wondered why his landlady was not offering a standard one- or two-year lease. “Do you want to make sure this is open and available during the prime season of rentals?” he said he asked. She chuckled and said yes, Mr. Muñoz said.

Mr. Muñoz’s landlady may get a boost from the warm weather, but no one knows where the market will be in 2010.

“My assumption would be over the next year that you’re going to see effective rents drop because of the increase in concessions,” said Andy Joynt, a real estate economist at Property and Portfolio Research, an independent research and advisory firm. “We’re forecasting that asking rents are also going to drop,” he added. “We’ll see if that ends up being reflected in the numbers.”

Marc Lewis, the president of Century 21 New York, has seen several recessions in his many years in the business, most recently after Sept. 11, 2001. “But in the past,” he said, “it always felt like it would be a few months and then it would be over. This one, we don’t have an answer yet.”

Many people — including President Barack Obama — are suggesting that the economy is likely to get worse before it gets better. And the rental market is unlikely to strengthen until the economy, and the job market in particular, turns around.

According to the Independent Budget Office of New York City, the outlook is bleak. The agency expects the city to lose 243,000 jobs from the peak of early 2008.

“Let’s hope this is a short-term problem,” said Vicki Been, the director of the Furman Center for Real Estate and Urban Policy of New York University. “You know, we prefer more affordable housing, until there’s a downturn. And then we panic.”