"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," says REBNY president Steven Spinola in a release. Michael Slattery, SVP of REBNY, tells GlobeSt.com. "Retail asking rents have begun to reflect the effects of the recession," he explains "Since September 2008, the turmoil in the financial sector has reverberated through the real estate industry and retail market. The decline in average asking rents is a reflection of these larger economic conditions and an anticipated correction in the market that was experiencing unsustainable rent growth." Rents went up 54% between fall 2001 and the fall of '08, according to REBNY.

Slattery adds, "Despite these declines and the growth in sublet space, leasing activity is still occurring in the market and new retail tenants are looking for space in New York for the first time. We expect that national retailers not presently in New York will see these declines in rent as an opportunity to enter or expand in the New York market."

According to the spring 2009 report, retail rents were down overall in each of the Manhattan geographic areas surveyed with declines ranging from 6% in Midtown to 22% on the West Side compared to fall 2008. The report cited a 12% drop in East Side asking rents, 13% declines for Downtown and Upper Manhattan and a 14% reduction for Midtown South. However, some corridors within those geographic areas showed modest increases compared to six months ago, including Fifth Avenue in the Flatiron District and Broadway in Soho.