Manhattan Rents Break Records—And Could Climb Higher This Summer

Despite growing supply, Manhattan rents continue surging, fueled by demand and recent policy shifts.

Jordan B.
June 16, 2025

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Good morning. Despite growing supply, Manhattan rents continue surging, fueled by demand and recent policy shifts. Plus, Senate Republicans are reviving a controversial plan to sell up to 3.3 million acres of federal land.

Today’s issue is sponsored by Agora—experience the future of real estate investment management.

🎙️ This week on No Cap podcast, CrowdStreet’s leadership opens up in a rare interview about rebounding from its fraud scandal while doubling down on tech, trust, and a bold expansion into private markets.

Market Snapshot

S&P 500

GSPC

5,976.97

Pct Chg:
-1.23%

FTSE NAREIT

FNER

768.55

Pct Chg:
-0.49%

10Y Treasury

TNX

4.428%

Pct Chg:
+0.004

SOFR

30-DAY AVERAGE

4.303%

Pct Chg:
-0.00

*Data as of 06/13/2025 market close.

Rental Trends

Manhattan Rents Shatter Records Again as Market Heats Up Early

New York’s rental market is defying the calendar, with Manhattan rents hitting new highs well before peak season—and more increases likely on the way.

New highs: Manhattan’s median rent reached a record $4,571 in May, an 8% year-over-year jump, according to Jonathan Miller’s report for Douglas Elliman. This marks the third time in four months that the borough has hit an all-time high, defying typical seasonality where rents peak in summer. The east side of Manhattan saw the sharpest rise—over 10% annually—while the luxury segment plateaued at around $10,500.

Supply and demand: Inventory hit a post-2021 high with over 11,700 available units in May. Even with an 85% year-over-year increase in expected new deliveries (34,000 units projected for 2025), demand hasn’t slowed. Elevated mortgage rates are keeping would-be buyers in the rental market longer, which is helping prop up prices.

Policy changes: The newly implemented FARE Act, which bans landlords from shifting broker fees to tenants, may further pressure rents upward. Landlords are expected to offset those costs by building them directly into the rent—a move likely to push average prices even higher through the peak leasing season.

Zoom in: Brooklyn's median rent rose just 1.4% YoY to $3,650, but inventory surged 43%, and price per square foot hit a record high of nearly $60. Northwest Queens saw a 7% jump to $3,625, with inventory more than doubling from last May. These boroughs remain more affordable alternatives but are clearly not immune to upward pressure.

➥ THE TAKEAWAY

Heating up into summer: Even with more apartments hitting the market, don’t expect prices to ease in Manhattan anytime soon—policy shifts and buyer hesitancy are keeping the rental engine running hot well ahead of the usual summer peak.

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✍️ Editor’s Picks

Mobile home metrics: Get a capital allocator’s inside view on what truly drives mobile home park performance, including how to assess execution risk, operator fit, and long-term asset viability. (sponsored)
Market transformation: Median US CRE deal sizes have grown significantly in dollar terms, despite the typical building getting smaller—highlighting a sustained rise in price PSF.
Positive sentiment: U.S. consumer confidence ticked up in June for the first time in six months, with the University of Michigan index rising to 60.5, though optimism remains well below late 2024 levels.
Fewer Snowbirds: Canadian travel to the U.S. dropped sharply in May—vehicle entries down 38.1%, air travel 24.2%—as tariffs and stricter immigration rules take a toll.
Warning signs: JPMorgan CEO Jamie Dimon flagged growing concerns over the U.S. economy, citing inflation and job losses as indicators that key metrics may soon worsen.
Land for housing: Senate Republicans are reviving a controversial plan to sell up to 3.3 million acres of federal land in 11 Western states to fund housing development—drawing internal GOP pushback.

🏘️ MULTIFAMILY

Preserving properties: BH Properties is launching Haven Housing to enter the affordable and workforce multifamily sector, starting with 2,500 units across key Sun Belt states.
Fixed but flailing: Millennium Tower's repairs are complete, but resale prices remain down 20% as its history and a weak condo market deter buyers.
Midwest to mountains: Centerspace is offloading its Minnesota holdings while expanding westward, picking up multifamily properties in Salt Lake City and Fort Collins as it shifts focus to high-growth Mountain West markets.

🏭 Industrial

Doubling down: Micron Technology is ramping up its U.S. manufacturing investment to $200B, expanding in Idaho, New York, and Virginia after securing a revised CHIPS Act funding agreement.
Quality assets: Invesco has issued a $355M loan to Bridge Logistics Properties to refinance a 24-property, 2.45M SF industrial portfolio across six major U.S. states, targeting stable, infill assets in top logistics markets.
Logistics play: Dermody Properties has acquired a Wayfair-leased warehouse in California’s Central Valley, expanding its footprint along the key I-5 logistics corridor with another e-commerce-linked industrial asset.
Desert deal: EQT Real Estate has purchased the 1.1M SF Sarival Logistics Center in Phoenix from Blackstone for $128.2M—the region’s largest industrial sale this year—despite rising vacancy from ongoing development.

🏬 RETAIL

Tariff tracker: A new study from Harvard unveils a real-time system mapping how sudden U.S. tariff shifts ripple through retail prices, offering fresh insights into a major 2025 economic pressure point.
Shifting strategy: InvenTrust Properties has sold five California assets for $306M, redirecting the proceeds into high-growth Sun Belt markets like Atlanta, Phoenix, and Central Florida.
Doral deal: PGIM has sold CityPlace Doral, a grocery-anchored retail plaza in northwest Miami-Dade, for $87.5M, marking a notable trade in South Florida’s resilient retail sector.

🏢 OFFICE

Leasing challenge: Loan default at former Goldman HQ signals rising pressure in NYC’s office sector as owners face vacancies, lease renewals, and conversion.
Top-tier: Houston’s newest Class-A office buildings are outperforming the broader market, with sub-12% vacancy and rising rents, leaving fewer options and perks for tenants.
Distressed deal: Hudson Pacific sold its most vacant San Francisco office building, 625 Second St., for $28M—half its 2011 purchase price—as part of a broader effort to cut losses and rebalance its portfolio.

🏨 HOSPITALITY

Brand extension: Mondrian has launched sales for its first-ever standalone branded residences in South Florida, partnering with PPG Development and BH3 Management to debut the Hallandale Beach project.

A MESSAGE FROM BUILDOUT

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📈 CHART OF THE DAY

Small investors dominated the housing market in 2024, making up a record 59.2% of investor purchases as their activity rose 3.7% year over year. Meanwhile, large investors saw their share drop to a 17-year low, with purchases falling 8.7% to the lowest level since 2018.