New York City A seven-year boom in Manhattan’s retail rent costs has finally run its course. Rental costs plunged 11% since fall 2008, a drop that puts asking rents down to approximately $115 per square foot, according to the Real Estate Board of New York’s annual spring report.
The study, released Thursday, covers all of Manhattan’s neighborhoods, including the city’s prime retail regions. Understandably, these areas took the strongest hits. For example, the asking rents in the Flatiron District dropped 29% to $285 a sq. ft., and Broadway between West 72nd and West 86th Streets dipped 24% to $293. This neighborhood commanded $384 last spring, the study said.
Even the busy Herald Square area between Fifth and Seventh Avenues took a 23% slide to $508.
“Declines in asking rents have just begun to be reported, although the retail market has been feeling the effects of the recession for some time,” REBNY president Steven Spinola said in a statement.
Lower rents could open the door to new tenants that were previously intimidated by high rates. Discount retailers, including Nordstrom’s Rack outlet chain, Marshall’s and T.J. Maxx could be among the first to take advantage of the lower asking prices, according to an article in Crain’s New York Business.