(For more retail coverage, click GlobeSt.com/RETAIL.)
NEW YORK CITY-In the last five years, more than 50 retailers have established flagship stores in Manhattan, according to the results of the Real Estate Board of New York's fall retail report. Those retailers, including such names as the Home Depot, Whole Foods and American Eagle Outfitters, have leased almost 500,000 sf. REBNY president Stephen J. Spinola says this "clearly demonstrates the bounce-back the retail market has made since 9/11." Retail rents on major corridors increased by as much as 32% compared to last year, according to the report.
"Retail rents are a good indicator of the health of our city's economy," Spinola continues. "When demand for retail space translates to rising asking rents, we know that retailers want to be in New York."
The Third Avenue corridor between 60th and 72nd streets saw asking rents for ground-floor space surge by 32% to $248 per sf compared to last year. Retail rents in Lower Manhattan also escalated. Broadway between Houston and Broome streets in SoHo jumped 27% to $228 per sf, while on Hudson Street between Chambers and Canal in TriBeCa, retail rents climbed 21% to $68 per sf. Moving uptown, Fifth Avenue between 49th and 59th streets, had retail rents that were up 15% to $817 per sf and the 125th Street corridor retail rents increased 13%.
Spinola notes that there has been continued demand for retail shops in tourist destination such as SoHo, the Meatpacking District and the 125th Street corridor. The average asking rent for all retail space in Manhattan rose 5% to $102 per sf."Based on this report, it is clear that the retail market has surpassed the levels it had attained prior to 9/11 and is expected to see increased activity," Spinola says. "The retail brokers that contributed information to the report believe that prime retail spaces, where there is heavy foot traffic, and tourist areas in particular will fetch higher rents. We've also heard that many of the prime spaces for retailers have already been leased, and that banks continue to snatch up prime corner spots." He adds that the 12% increase for retail rents in Lower Manhattan on Broadway between Battery Park and Chambers Street, "demonstrates that the neighborhood will continue to grow and the future is now downtown."
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