NEW YORK CITY—Strong consumer demand and a tourism boom in New York City led to rising retail rents along Manhattan's major shopping corridors this Spring, according to the Real Estate Board of New York's Spring retail report.
The area with the biggest surge was Fifth Avenue between 49th and 59th streets, which had the highest average ground floor asking rent among all primary shopping corridors citywide, setting a record at $3,550 per square foot, with rents increasing 16% compared to last year. The Times Square retail corridor also reached a new high with average ground floor asking rents climbing 11% over last year to $2,407 per square foot.
Other primary shopping corridors with significant ground floor asking rent increases this spring include Madison avenue between 57th and 72nd streets, where asking rents jumped 24% to $1,643 per square foot after a period of store repositioning in that corridor; Herald Square along West 34th street, where rents increased 22% from last year to $883 per square foot and Broadway in SoHo between Houston and Broome streets, with average asking rents increasing 19% to $890 per square foot.
“New York City's retail leasing market is seeing renewed vibrancy this spring as asking rents in the primary shopping corridors including Fifth Avenue, Madison Avenue and Broadway in SoHo, among others, are surging amid strong consumer demand and the continuing tourism boom,” says Steven Spinola, REBNY president. “Our retail advisory group—made up of the city's leading retail brokers—tells us that low interest rates and high demand among retail tenants is leading to a more vibrant and desirable tenant mix, particularly along Fifth avenue and Broadway. The trend is clearly a benefit to residents and visitors alike as it brings more shopping options.”
Beyond the major retail corridors with heavy tourist foot traffic, the report found that retailer demand is more price sensitive and focused on the bottom line. For example, Third avenue corridor retailers may take more time to commit to leases and other factors such as street/avenue frontage and ceiling height may affect the space's value as much as locational factors, REBNY reports.
Overall average asking rent for retail space throughout Manhattan was $139 per square foot, up 20% since last spring. Retail broker and expert Faith Hope Consolo, chairman of the retail practice at Douglas Elliman, was not surprised by the results of the survey.
“This is a testament to the strength of the retail market in the city—and particularly of Fifth Avenue—which remains the most-requested destination for large international brands. Madison avenue remains Luxury Central, with a second luxury focus in Soho, while Times Square is fulfilling every dream that all of us who worked on the revitalization effort ever had—it serves tourists and locals. The rents reflect that appeal.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
