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Retail: The Region's Strength Holds Up

Store performance is buoyed by foreign tourism, although Wall Street worries could take their toll.

By Paul Bubny | Updated on April 18, 2008

Even as two major industry associations are reporting declines in March same-store sales, the New York region’s retail sector is holding up well, CB Richard Ellis’ Richard Hodos tells Real Estate New York.

“Once again, New York is running counter to the rest of the country,” says Hodos, EVP with CBRE’s New York tri-state region retail services group. “Manhattan stores are holding their own, and in some cases they’re up, largely due to the dollar situation with the euro and the pound and the extent of tourism. I think we have more tourists now than we’ve ever had. That has kept Manhattan very buoyant and very steady in terms of retail sales.”

Particularly on the avenues and major thoroughfares, “there has been no softening whatsoever,” Hodos says. “I think we might be in a plateau in terms of rents, but they certainly aren’t falling. There’s not vacancy, and particularly in Manhattan, we need vacancy for an extended period of time before rents actually fall. There is some more negotiability on side streets—secondary or tertiary locations—and they’re being repriced a bit. But on the major thoroughfares and avenues, rents are as high as they’ve ever been.”

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