By Orlando Lee Rodriguez
As the crowds filling the sidewalks of Broadway south of Houston Street become larger and larger each week, retail rents on the main thoroughfare, as well as on Prince, Spring, Wooster and Mercer, have skyrocketed.
Soaring prices, however, have not had a negative impact on demand, as upscale retailers continue to vie for space in the original New York artists enclave, say analysts. Over the first quarter of 2013, prices for retail spaces in SoHo shot up 34.7 percent from the previous quarter, to $423 psf, according to data compiled by Cushman & Wakefield.
This is a new price high for the historic cast-iron district. In the first quarter of 2012, the average retail price in SoHo stood at $309 psf, a 19.8 percentage jump on the previous year.
Overall, the past threes years have SoHo retail rents break new records and exceed previous all-time highs from 2007, when the average asking rent was $275 psf.
What is also significant is that rents have continued to rise despite a higher level of available spaces. SoHo’s availability rate currently stands at 9.6 percent, well above the almost six percent rate it was a year ago and the near five percent low it hit in 2011.
“The significant amount of recent leasing activity in the SoHo submarket has largely been driven by some of the world’s most notable fashion and luxury brands,” said Michael O’Neill, a Cushman & Wakefield senior director. “These commitments have created desirable co-tenancy, fueled increased demand, and resulted in a significant year-over-year increase in rent expectations.”
Three weeks ago, fashion designer Michael Kors signed a lease for 15,000 s/f of retail space at 520 Broadway for a flagship store. In February, Kima Zabete signed a 10 year lease for a 10,000 s/f at 477 Broome Street, according to media reports.
Additional leases signed in the past six months include Pandora, Gundrun Sjoden, Etienne Aigner, Rebecca Minkoff and Soul Cycle, as well as a host of online retailers opening their first brick and mortar locations, according to Cushman & Wakefield.
“SoHo rents have escalated to beyond what they were before the downturn, approximately 20 percent higher, depending on the specific streets,” said Faith Hope Consolo, chair of Douglas Elliman’s retail group. “Demand is high for this shopping corridor, mostly [from] the larger companies, big labels and brands. The foot traffic is incredible and tourists go there from all over the world.”
However, despite SoHo continuing to heat up both in action and prices, the area still takes a backseat to Fifth Avenue between the Plaza Hotel and Rockefeller Center.
The famed Fifth Ave strip, saw the second largest price growth rise at 15.2 percent, and still is the most expensive retail rent area in the city, with the average asking price hovering around $2,631 psf.