SOURCE: Real Estate Board of New York (REBNY)

Real Estate Board of New York (REBNY)

May 19, 2011 09:30 ET

NYC Retail Report: Lower Manhattan Shopping Corridor in High Demand With 23% Rise in Average Asking Rents

Rents for High-End Shopping Destinations on Fifth and Madison Avenues Level Off With Prime Spaces Already Taken

NEW YORK, NY--(Marketwire - May 19, 2011) - As New York City's retail market continues its recovery from the global recession, some of the city's primary shopping corridors are seeing increases in asking rents for available retail space, while others are seeing rents plateau.

According to the Real Estate Board of New York's (REBNY's) Spring Retail Report, Lower Manhattan has attracted significant interest from retailers. The Broadway corridor from Battery Park to Chambers Street in the Financial District saw a 23 percent increase in asking rents to $184 per square foot, compared to Fall 2010 numbers, and a 36 percent surge compared to Spring 2010. The surge is attributed to the visible progress of office construction at the World Trade Center site and the planned opening of the 9/11 memorial later this year.

Retail areas below 14th Street saw an increase of four percent overall with asking rents per square foot for all space (ground floor and other) averaging $103 per square foot.

"Lower Manhattan has been receiving national and international attention as a result of the progress at the World Trade Center site. The rise in asking rents for retail space shows that retailers are looking to capitalize on the increase in pedestrian traffic expected there in the years to come," said Steven Spinola, REBNY president. "Increased tourism has also had an impact on the city's retail market according to our advisory group as the high-end shopping corridors, such as Fifth Avenue and Madison, have limited available space."

Uptown on East 86th Street between Lexington and Second avenues, average asking rents for ground floor space increased 14 percent compared to Fall 2010 and two percent compared to Spring 2010 to $333 per square foot. On the Westside, Columbus Avenue between 66th and 79th streets, asking rents jumped eleven percent compared to Fall 2010, and five percent compared to Spring 2010 to $255 per square foot. On Fifth Avenue between 42nd and 49th streets, asking rents increased three percent compared to Fall 2010 and 21-percent compared to Spring 2010 to $515 per square foot.

The report compiles data provided by a broad cross section of the city's leading retail brokers. According to REBNY's advisory group, steady growth in tourism as a result of the depreciating value of the dollar has been a boon to New York City's major retail corridors. "Visitors from around the world have been a vital aspect of our improving economy," notes the executive summary.

Other retail corridors did not fare as well. A lack of availability in the high-end retail corridors like Madison Avenue and Fifth Avenue between 49th and 59th streets has led to rents leveling off in these areas. Asking rents in the Madison Avenue corridor decreased to $919 per square foot for ground floor space, 12-percent off from last Fall and four percent off from Spring 2010. On Fifth Avenue between 49th and 59th streets, asking rents were down five percent compared to Fall 2010 and two percent compared to Spring 2010 to $2,250 per square foot.

Other report highlights:

  • Manhattan average asking rent for all retail space was $115 per square foot, a three-percent decline from Fall 2010 and a one-percent increase from Spring 2010.
  • Asking rents for ground retail space on Madison Avenue between 57th and 72nd streets declined 12 percent compared to Fall 2010 and 4 percent compared to Spring 2010.
  • On Broadway/7th Avenue between 42nd and 47th streets, asking ground rents decreased six percent compared to Fall 2010, but increased 21 percent compared to Spring 2010, to $1,600 per square foot.
  • Retail corridors in the Flatiron District and 34th Street in Herald Square had mixed results. On Fifth Avenue between 14th and 23rd streets in the Flatiron ground floor asking rents were up eight percent over Fall 2010, but down four percent over Spring 2010 to $275 per square foot. On West 34th Street between 5th and 7th avenues in Herald Square, ground floor asking rents rose nine percent over Fall 2010 and declined nine percent over Spring 2010 to $455 per square foot.

For the full report visit www.rebny.com.

About The Real Estate Board of New York
The Real Estate Board of New York is the city's leading real estate trade association with more than 12,000 members. REBNY represents major commercial and residential property owners and builders, brokers and managers, banks, financial service companies, utilities, attorneys, architects, contractors and other individuals and institutions professionally interested in the city's real estate. REBNY is involved in crucial municipal matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes and legislation. In addition, REBNY publishes reports providing indicators of market prices for both the residential and commercial sectors. Please visit us online at www.REBNY.com.

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