A national real estate investment trust said Thursday that its suburban assets in New York and New Jersey will likely outperform projects in the five boroughs in 2017, where the Manhattan market has hit headwinds and a significant supply of new apartments is set to hit Brooklyn and Queens.
AvalonBay Communities said on a fourth quarter earnings call that it expects revenue growth in the city, where it owns buildings across a number of neighborhoods, to be around 1% this year. In Westchester and on Long Island, that growth is expected to be around 2%, while in northern and central New Jersey revenue growth will be closer to 2.5%
“We do expect New York City to be the weakest performing market of our broader New York, New Jersey portfolio in 2017,” Sean Breslin, chief operating officer of the firm, said on the call, according to a transcript from financial website Seeking Alpha.
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Breslin said that the supply of new apartments in Long Island City, Queens, will increase dramatically this year, which may affect the performance of a waterfront rental building it owns called AvalonBay Riverview. In Brooklyn, where the REIT is currently leasing up an 823-unit project, there will be roughly double the number of new apartments that came on line in 2016. That sudden increase in supply will broadly temper rent growth in these areas, though the REIT said it expected strong leasing to continue at its Brooklyn development.
As of last month, the median rent in Manhattan grew by roughly 1% compared to the year before, though concessions are up and rents for newly developed buildings actually fell by nearly 10%, according to a December market report from appraisal firm Miller Samuel. In Brooklyn, rents are down across the board. Queens, however, posted double-digit gains.
A national real estate investment trust said Thursday that its suburban assets in New York and New Jersey will likely outperform projects in the five boroughs in 2017, where the Manhattan market has hit headwinds and a significant supply of new apartments is set to hit Brooklyn and Queens.
AvalonBay Communities said on a fourth quarter earnings call that it expects revenue growth in the city, where it owns buildings across a number of neighborhoods, to be around 1% this year. In Westchester and on Long Island, that growth is expected to be around 2%, while in northern and central New Jersey revenue growth will be closer to 2.5%
“We do expect New York City to be the weakest performing market of our broader New York, New Jersey portfolio in 2017,” Sean Breslin, chief operating officer of the firm, said on the call, according to a transcript from financial website Seeking Alpha.
Breslin said that the supply of new apartments in Long Island City, Queens, will increase dramatically this year, which may affect the performance of a waterfront rental building it owns called AvalonBay Riverview. In Brooklyn, where the REIT is currently leasing up an 823-unit project, there will be roughly double the number of new apartments that came on line in 2016. That sudden increase in supply will broadly temper rent growth in these areas, though the REIT said it expected strong leasing to continue at its Brooklyn development.
As of last month, the median rent in Manhattan grew by roughly 1% compared to the year before, though concessions are up and rents for newly developed buildings actually fell by nearly 10%, according to a December market report from appraisal firm Miller Samuel. In Brooklyn, rents are down across the board. Queens, however, posted double-digit gains.
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