Commercial Grade

by Cicero, The appraisal philosopher

In that annual rite of spring the new rent stabilization increases have been announced by the Rent Guidelines Board.  This year the increases are fairly modest, only 2% for a 1-year lease and 4% for a 2-year renewal.  The vacancy allowance remains the same.  This is great theater for us real estate nerds, where the landlords are all depicted as greedy villains by the tenants, and the tenants are all depicted as greedy freeloaders by the landlords.  The current increases are the lowest that they’ve been in ten years, and well below the 10-year average of 3.5% and6.53% for one and two-year leases, respectively, as illustrated below:

For Leases                               ————Lease Term——-

Starting Between                                 1 Year              2 year

10/1/02 – 9/30/03                             2 .0%               4 .0%

10/1/03 – 9/30/04                             4.5%                7.5%

10/1/04 – 9/30/05                             3.5%                6.5%

10/1/05 – 9/30/06                             2.75%              5.5%

10/1/06 – 9/30/07                             4.25%              7.25%

10/1/07 – 9/30/08                            3.0%                5.75%

10/1/08 – 9/30/09                            4.5%                8.5%

10/1/09 – 9/30/10                            3.0%                6.0%

10/1/10 – 9/30/11                            2.25%              4.5%

10/1/11-9/30/12                              3.75%              7.25%

10 year average                                 3.50%              6.53%