Since the late 1960s, Manhattan has seen an average of roughly 12,000 new development rental units hit the market each year, according to Columbia University’s Center for Urban Real Estate. But as data from the brokerage Citi Habitats shows, only 15,723 new development rentals units came on the market from 2008 to 2012.
The pipeline of new rentals is now beginning to recover from the recession. There are some 23,000 new development rental units slated to come on the market in Manhattan by the end of 2017, according to Citi Habitats. But this is still a low figure in historical terms.

And the supply of new rentals is not expected to swell anytime soon. With home prices going up and banks more open to construction lending, developers have started building condos again after several years of preferring to build rentals. The rentals projects are being put to the side in a healthy market for sales.
As a result, the few rentals hitting the market now are seeing a frenzy of demand, with some generating long waiting lists. And while most new rental developments on the market now are relatively small, many of the projects in the pipeline are massive. Yet the units themselves are smaller than in the past.

The Real Deal recently compiled a list of the new rental developments in Manhattan and prime Brooklyn that have come on the market in the past year and those currently in the pipeline.
In the last year, some 22 large new-construction rental buildings (those with 15 or more units) have hit the market in Manhattan and prime Brooklyn, according to data from real estate database CityRealty and permits filed with the Department of Buildings. That figure — which includes 10 projects in Manhattan and 12 in Brooklyn — is significantly lower than in most years.
In Williamsburg, both the two rental projects 250 North 10th Street, a 232-unit building, and the 229-unit 50 North 5th Street had a waiting list of around 1,000 names when they started their marketing efforts a few months ago.

What’s more, 36 new rental projects are planning to hit the market in Manhattan in the next few years, and 30 slated for Brooklyn. That relatively meager pipeline is a result of both rising land costs and shifting trends in construction financing. Immediately after the financial crisis, lenders were more willing to finance rentals than condos. But they’ve recently started warming up to condo lending again as market conditions have improved.
Some major developers who have long focused on rentals are now turning their attention to condos.
And if condo prices continue to increase, the leasing pipeline could shrink even more as projects slated to be rentals switch gears. That’s the reverse of what happened during the credit crisis, when failed condo projects started leasing out their units because buyers were scarce.

Supersized Rentals
Many of the rental developments that are making their way through the pipeline will, however, have many more units than the projects on the market now.

According to The Real Deal’s research, the 351-unit 101 Bedford in Williamsburg has the most units of any rental project to launch in the past year. By contrast, the Domino Sugar redevelopment, developed by David Walentas’ Two Trees, which is expected to break ground next year, is slated to have a stunning 2,284 rentals (although 660 of them will be set aside as affordable). And the Gotham Organization’s massive Gotham West project on the Far West Side is slated to have 700 market-rate rental apartments, plus 540 affordable units.
Other new large rental projects in the pipeline include the Moinian Group’s under-construction Atelier II at 605 West 42nd Street. Due to be completed in 2015, the 61-story project is set to include 1,669 rentals, according to the most recent DOB filings. AvalonBay Communities’ Avalon Willoughby at 88 Willoughby Street in Downtown Brooklyn, meanwhile, will reportedly have 861 units.

Manhattan land costs these days are so high that the only way for developers to turn a profit is by outfitting their projects with condo-like amenities in order to charge between $70 and $80 per square foot, and then packing in as many units as possible. Brooklyn projects now charge between $55 and $65 per square foot.
The one-bedroom used to average between 650 square feet to 850 square feet in size. That unit now is being built mostly closer to the 650 square feet mark.

50 North 5th Street in Williamsburg, which began leasing in September, has over 15,000 square feet of amenity space, including two lounges, an indoor basketball court and a bocce court. Monthly rents at the building start at $2,600 for a studio and climb to $7,000 for a two-bedroom penthouse.
So far at least, high rents and waiting lists don’t seem to be deterring tenants. At 50 North 5th Street, for example, 30 of the project’s 229 units were leased in the first week.