Manhattan’s robust shopping corridors are retaining their status as the nation’s retail epicenter, according to a new report.
During the last six months, rising demand and competition for space in the borough’s most prestigious corridors catapulted average asking rents to peak levels, according to The Real Estate Board of New York’s (REBNY’s) Fall 2013 Retail Report.
The demand for ground floor space in the most sought-after shopping districts not only came from established and high-profile retailers, but also from newer and specialty stores.
These tenants are bidding for choice, storefront space in the new mixed-used and renovated developments sprouting up around the city.
“We’re seeing growing diversity in the tenant base in Manhattan’s prime retail corridors. This is keeping the market healthy and strong, while adding to the character of the neighborhoods,” said Steven Spinola, REBNY President.
“Our advisory group reported strong demand in many locations driving the asking rents so high in these areas that even more established retailers are returning to the more traditional corridors where customer demand has been well tested.”
According to the report, average asking rents saw the biggest jumps along the following corridors:
• Madison Avenue Corridor (between 57nd and 72nd streets) rose 42 percent since Fall 2012 to $1,380 per square foot and four percent since Spring of this year.
• Westside Broadway Corridor (between 72nd and 86th streets) average rents rose 38 percent to $434 per square foot from Fall 2012 and 46 percent from the Spring due to fewer availabilities especially for lower-priced retail spaces.
• Fifth Avenue Corridor (between 49th and 59th streets) again achieved the highest average rent of $3,170 per square foot, a four percent increase from this spring and 18 percent jump from last Fall.
• Flatiron Corridor (Fifth Avenue between 14th -23rd streets) average rents rose 47 percent to $400 per square foot from Fall 2012.
• Financial District Corridor (Broadway between Battery Park-Chambers streets) rose 69 percent from Fall 2012 to $257 per square foot as high quality space has become available.
• SoHo Broadway Corridor (Houston-Broome streets) rose 41 percent since Fall 2012 to $762 per square foot with fewer availabilities and higher-priced spaces becoming available.
Boutique retailers that have signed on major corridors in the last six months include Maje at 217 Columbus Avenue, Sandro at 181 Columbus Avenue, and Mille-Feuille Bakery at 2175 Broadway.
“The fact that rents continue to rise in an already robust market underscores Manhattan’s appeal and the viability of the city’s recovery since the downturn,” Spinola said.
Another development is the rise of new residential units along the 57th Street corridor. These buildings will provide the market with large and modern retail spaces and a vital link to customers on east 57th Street.
REBNY’s Retail report compiles data about asking rents for available space provided by a broad cross-section of the city’s leading retail brokers. The report is compiled twice a year in the spring and fall.