If the brick-and-mortar storefront is doomed, word still hasn’t reached Fifth Avenue.
Average asking rent for retail space along the well-trod sidewalks between 49th and 59th streets was just over $3,000 psf, according to CBRE Group’s analysis of the second quarter of 2013.
The corridor has seen some high-profile deals so far this year, including Ralph Lauren’s lease for 38,000 s/f at 711 Fifth Avenue.
The company is reported to be planning a flagship presence for its Polo brand, complete with an in-store restaurant.
Valentino also took 20,000 s/f over four stories of the Takashimaya Building at 693 Fifth, and Cartier has leased 5,600 s/f at 767 Fifth while its mansion at 653 Fifth is being renovated.
Marc Jacobs is also planning a Marc by Marc Jacobs store somewhere on Fifth, according to the fashion press.
“Retail rents in the second quarter were generally strong,” Richard Hodos, executive vice president, CBRE Retail Group, said in a press release. “The escalating rents on the Fifth Avenue corridor show that international brands are still eager to benefit from the heavy foot traffic and global prestige of having their name on Fifth Avenue.”
The need for brand exposure is driving the steady rent increases on prime Fifth Avenue, according to retail brokers, who think the increases are based on solid market fundamentals.
“These are numbers sustainable for a select group of retailers who are in excellent financial condition and whose business demands these locations,” said Steven Rappaport of Sinvin Realty.
The number of tourists visiting New York City is expected to exceed 55 million by the end of the year, Faith Hope Consolo, of Douglas Elliman’s retail group, pointed out. And the corridor is attracting brands from around the world looking to make their mark.
“Fifth Avenue has never lost its value during any of the several downturns and has only increased in value,” Consolo said, adding, “Fifth Avenue is our Champs Elysee.”
Consolo questioned CBRE’s numbers, saying that her own data shows average asking rent on the 10 blocks of prime Fifth Ave is closer to $3,500 psf.
Elsewhere in the city, asking rent in Time Square held steady at $2,413 psf, according to CBRE, and jumped 10.15 percent on the Flatiron district stretch of Fifth Avenue between 14th and 23rd Streets. Lower Broadway, meanwhile, saw asking rent drop 8.84 percent from the previous quarter.