Rent levels in Boston are being affected by newly built properties such as Archstone Boston Common, a high-rise apartment building located between the Financial and Theater districts that opened in August.

With a fresh supply of newly constructed apartments becoming available in Boston, rental rates have remained relatively flat and in some cases have declined.

A review of 104 professionally managed, market-rate apartment properties in Boston shows that the average monthly rent has retreated to $1,791 from $1,855 in the second quarter, according to a survey by the Northeast Apartment Advisors, an Acton-based research firm that plans to release a full report on market conditions in the Boston metro area in December. Occupancy rates have remained virtually unchanged at 97 percent, according to the analysis.

While rents have crept up in Greater Boston, city rent levels are being affected by newly built units that have started leasing recently, including upscale projects like Trilogy in Boston’s Fenway neighborhood, Archstone Boston Common in Downtown Crossing and Park Lane Seaport along the waterfront, explained Thomas Meagher, president of Northeast Apartment Advisors.

“We are a market that has attracted a lot of institutional and national interest, which is resulting in a significant amount of new housing being built throughout the metro area – in many cases by national players,” said Meagher, whose survey examined conditions at a total of 15,601 units in Boston.

Meagher said if the newly built apartment properties – such as Archstone Boston – were included in the survey, the average rental rate would have been higher. Asking rents for two-bedroom apartments at the 374-unit Archstone project are as high as $3,485, according to the company’s Web site. At Trilogy, a 581-unit luxury community that started opening in phases this summer, rents range from $1,500 up to $4,500.

Chris Reilly, an area vice president for Equity Residential – a national development firm that owns and manages the 1,175-unit Charles River Park and is building another 310 apartments in the West End – said while rental market conditions have improved, they have not fully recovered to the peak levels seen in 2001.

“There’s a lot more softness in the market than we would normally expect to see. A lot of it is supply-driven,” said Reilly, who is president-elect of the Rental Housing Association in Boston. “There have been an awful lot of new units delivered to the market over the last three years that are still being absorbed. That has made the vacancy rates higher and the rental rates lower than expected.”

Reilly said occupancy rates are around 94 percent to 95.5 percent for apartments within Route 128. Rents at Class B apartments in Boston suburbs have gone up about 6 percent, according to Reilly, but rents for Class A units have remained flat.

“We didn’t see a lot of growth between 2005 and into 2006,” he said. “We’re still seeing fairly anemic rent levels.”

Rents in Boston are similar to last year’s fourth quarter, when average monthly rents were $1,795, according to Northeast Apartment Advisors.

‘A Lot of Ground’
In the last four to five years, larger property owners found themselves dealing with a greater number of vacancies and offering various incentives to attract new tenants. Industry observers have blamed job layoffs, an influx of new apartments in and around Boston, and low mortgage-interest rates that have pushed longtime renters into buying homes for the softening market.

Heavy job losses have weakened demand for apartments in Greater Boston. The state lost 160,000 jobs during the last recession. Even though the Bay State has added more than 33,000 jobs in the past year – including 3,400 in September alone, according to the Massachusetts Department of Workforce Development – industry observers say there has to be a more significant boost in job numbers to improve conditions.

“There’s still a lot of ground to regain before we’re back to our normal Massachusetts economy,” said Reilly.

Nationally, apartment demand has been improving for 13 consecutive quarters, according to the National Multi Housing Council. Occupancy rates and rents are climbing in most markets and apartment firms are finding that it’s easier to acquire debt and equity, according to the council’s most recent quarterly survey of apartment market conditions released last week.

“Demand for apartment residences continues to rise, and should remain strong so long as employment keeps rising,” said Mark Obrinsky, NMHC’s chief economist, in a prepared statement. “While the slowdown in the condo market has had some impact on the investment demand for apartment properties, in every other respect the apartment industry seems to be firing on all cylinders.”

In the Boston area, vacancies started to decline and property owners began cutting back on concessions in late spring and early summer. The downturn in the housing market and any uncertainty over whether home prices will continue to decline could have helped rentals, with some renters deciding to wait instead of purchasing a home.

Still, some property owners are continuing to offer rent breaks to attract tenants.

At Christopher Columbus Park Plaza, a 151-unit property that is located along the waterfront in Boston’s North End, monthly rents have been reduced by $100 for the two vacant one-bedroom units. Santa Sarno, who manages the building, which is owned by Peabody Properties, said one unit has been empty for about three months and the other for a month.

“On those units we typically do not go below $2,050, but we went to $1,950,” noted Sarno.

While the two empty units concern Sarno, the occupancy rate is still a solid 98.6 percent, and the situation is much better than in the past. The building had as many as 15 vacant units this past March, according to Sarno, and tenants were being offered 13-month leases – instead of the typical 12-month leases – when vacancies were higher.

Still, Sarno said she is concerned because she has not gotten many inquiries about the vacant units. “It concerns me that we’re not upon the holidays yet and the phone is not ringing that much,” she said.

Reilly, of Equity Residential, pointed out that it can be difficult to gauge the health of the apartment market in New England because once Labor Day passes, few tenants move. Most moves take place between May and August, he said.

“It’s very seasonal,” he said. “In the summer, [concessions] all but disappeared. They are back in the market right now and will be through late fall and winter through next spring.”