By ETHAN ROTHSTEIN
East Coast Editor
Concerns about overbuilding and rent growth have spooked lenders. Rents have fallen by nearly 2% in Manhattan this year compared to 2016, and in places like Downtown Brooklyn, where thousands of units are coming online at the same time, fears of a glut have developers offering high concessions.
Bisnow: Ethan Rothstein Besen & Associates Senior Director Shallini Mehra, Ariel Property Advisors President Shimon Shkury and Rose Associates Chief Operating Officer Brian Peters speak at Bisnow's 2017 New York State of the Market.
"There’s a great deal of talk about oversupply in the rental marketplace and that’s particularly acute in some areas, like Downtown Brooklyn," Rose Associates Chief Operating Officer Brian Peters said. "The oversupply is going to prove to be temporary, and the time to start developing to deliver into the market in three years is now."
The lack of lender appetite for new construction loans is just one of the factors that have cut into New York City's apartment pipeline. A lack of available land, and the cost to buy the parcels that are on the market have hampered developers aching to build ground-up apartments. Rent stagnation has also put the brakes on building sales as investors do not anticipate being able to raise rents — and therefore profit — on buildings they acquire.