By Steven Spinola
The first quarter of 2015 was an exemplary one for residential real estate, and REBNY’s recent Spring Retail Report has shown that fortune has also favored the commercial industry as well.
This is thanks to a number of deciding factors, such as stability in the market conditions, tenants seeing the market with more clarity, more effective definitions of an area’s value, and others.
Despite the recent rise of the dollar, the market has also remained resiliently active, with both major domestic and international brands continue to show an encouraging interest in seeking spaces in New York City.
Fifth Avenue between 49th and 59th Streets have historically been New York’s most expensive corridor, but this quarter saw the ground floor asking rent for that area rise to $3,683 – a modest 4 percent compared to the Spring of 2014. Asking rents for the ground floor in Times Square between 42nd and 47th Streets showed a similar pattern, increasing less than 1 percent to $2,413 per square foot, and Madison Avenue’s asking rents were similarly steady. In fact, compared to Spring 2014’s asking rent of $1700, Madison Avenue’s only increased three percent.
Asking rents for ground floor retail space on East 86th between Lexington and 2nd Avenue have continued their upwards trend, this quarter ascending to $456 per square foot. According to Advisory Group, this area has undergone a tremendously successful retail transformation, granting it amazing potential for further growth, which accounts for the rising rents and gives us a glimpse into how successful this area will become in the near future.
Pre-recession residential development was also a deciding factor in creating growth in this area, and is sure to continue making the area a desirable one.
Ground floor asking rents in Meatpacking District on 14th Street between 9th and 10th Avenue increased 10 percent since Spring 2014’s asking rents of $372 per square foot. Despite other nearby areas becoming increasingly desirable, Meatpacking’s rents have continued to remain robust, with additional help from the foot traffic generated by the popular Chelsea Market and the High Line. Combined with foot traffic from nearby offices, Meatpacking District is likely to remain able to hold its own amidst its popular surroundings.
The current economic circumstances in New York City are very favorable towards the retail industry right now.
In April, the University of Michigan Consumer Sentiment Index showed that consumers are particularly sure of and have faith in the market, which will translate into and be reflected in their propensity to spend.
In fact, consumer sentiment levels are the highest they have been since 2007, and local job growth in the retail sector is also on the rise. New York City private employment has grown close to 3 percent since March 2014, and construction employment has grown almost 14 percent during that time period. The City also had the most international visitors in its history last year, reaching 12.2 million, 1.3 million more visitors than last year.
By compiling this data and issuing our Retail Reports, REBNY hopes to provide an overview of the market at a particular point in time that is based on the available listings of our Advisory Group and our Rental Committee members, which includes all of the major retail brokers and owners in Manhattan. New York City is off to a great start to 2015, both residentially and commercially, and I greatly look forward to watching that trend grow as we move forward into summer.
In other REBNY news:
REBNY’s 2015 Spring Rental Summit will be on May 29. Come to the Mendik Education Center from 9:30 a.m. to 12:00 p.m. to join Gus Waite of RKNBM, Erin Stabb of TOWN Residential, Abe Esfandiary of Citi Habitats, Senad Ahmetovic, and moderators Dan Marrello and Douglas Wagner as they present “How Will The Summer of 2015 Be Different From All Previous Summers, and How Will You Stay Successful?” To register, visit www.rebny.com or contact Ossie Shemtov at OShemtov@rebny.com.
June 5 is REBNY’s Annual Downtown Breakfast Round Robin at the Brotherhood Synagogue! The Downtown Committee invites you to a special seminar and networking event, where you can come hear from industry experts who will each speak for approximately 15 minutes on their topic before rotating to the next speaker followed by a Q & A session. To register, visit REBNY.com. The fee for REBNY members is $20, and the fee for non-members is $35.
REBNY’s Annual Golf & Tennis Outing is on June 8 from 8 a.m. to 9 p.m. at the North Shore Country Club! Weather permitting, this fun and exciting outing will be a full day of golf, tennis, and swimming, and will also include lunch, cocktails, and dinner! For more information on registering for this event, contact Kathleen Gibbs at KGibbs@REBNY.com.
