New York City The outlook for the retail real estate market in New York is promising, according to the just-released “Spring 2010 Retail Report” from the Real Estate Board of New York (REBNY). The local retail market has continued to show steady improvement with average asking rents for ground floor retail space in Manhattan’s retail corridors increasing between 2 and 71% since fall 2009.
According to the spring 2010 report, retail rents were up in a number of Manhattan geographic areas surveyed, with increases of 3% in Midtown South Midtown South and 16% in Upper Manhattan compared to spring 2009.
In Midtown on Broadway and 7th Avenue between 42nd and 47th streets, average asking rents increased 71% to $1,400 per square foot (psf) and in the West Village on Bleecker Street between 7th Avenue South and Hudson Street, rents increased 30% to $456 psf.
In SoHo on Broadway between Houston and Broome streets, rents increased 16% to $563 psf. In Herald Square on West 34th Street between 5th and 7th Avenues, asking rents increased 19% to $500 psf.
“Asking rents are on the rise throughout Manhattan and the overall picture, nationally and locally is encouraging,” said REBNY president Steven Spinola. “Maintaining this pace will depend on sustaining this momentum and the prudent actions of government at all levels not to dampen this economic resurgence”
REBNY’s Retail Advisory Group, made up of the city’s leading retail brokers, is reporting a pick-up in leasing velocity over the past six months. Inventory within prime corridors is diminishing due to this increasing demand. East 57th Street, Times Square, and the once quiet Madison Avenue have been identified as areas with an inventory squeeze. The return of large transactions, with major retailers leasing high-rent locations for a lengthy term, such as Uniqlo on Fifth Avenue and Aeropostale and Disney in Times Square is another sign of growing market confidence.
In other report highlights:
- Downtown average asking rents increased 7% compared with last year to $101 psf, while West Side asking rents increased 10% to $128 psf.
- Upper Manhattan, however, had the sharpest rise in asking rents compared to last year increasing 16% to $60 psf.
- Declines in average asking rents were reported on the East Side (2%), and Midtown (11%).
- Midtown asking rents on 5th Avenue 49th and 59th Streets were up 41% on the year to $2,300 psf from a high last year of $1,631 psf.