The Real Estate Board of New York (REBNY), the City’s leading real estate trade association, today reported that asking retail rents throughout Manhattan have declined in all 17 reported corridors, as average asking price per square foot (PPSF) rents fell by as much as 25% year-over-year.
According to REBNY’s Fall 2020 Manhattan Retail Report, eight of Manhattan’s retail corridors experienced their lowest average asking rents in at least a decade, including SoHo, Flatiron – 5th Avenue, Upper Madison Avenue and Upper 5th Avenue, and Upper West Side – Broadway.
The new findings highlight how Manhattan’s retail market is adjusting amid the ongoing Coronavirus (COVID-19) pandemic and subsequent economic crisis. Many property owners continue to work with tenants on concessions, rent deferrals and other flexibilities on a case-by-case basis as owners and retail tenants alike grapple with the current landscape.
“Historic declines in rent across Manhattan’s most prominent retail corridors show just how much the market has adjusted amid the unprecedented impacts of the COVID-19 crisis,” said REBNY President James Whelan.
“While falling rents are an ongoing sign of the challenges facing the industry, the current environment also present opportunities for new retailers to enter the Manhattan market or for existing tenants to lock in low rates and pursue flexible rent agreements.”
Taking rents, according to the report, are noted as even lower than asking rents, and brokers have cited that there is a 20 percent average difference between asking rents and taking rents. Eleven corridors have witnessed increases in available retail space ranging from six to 67 percent year-over-year, reflecting a substantial slowdown in Manhattan’s retail transaction volume and contributing to the changing market.
Additional key findings from the Fall Manhattan Retail Report include:
- Average asking rents on Broadway (Houston St. – Broome St.) in SoHo declined 25% year-over-year to $367 per square foot. This represents a 62% decline from the corridor’s peak back in Spring 2015 and its lowest point since Fall 2006.
- Average asking rents on Bleecker St. (7th Ave S – Hudson St.) declined 9% year-over-year to $252 per square foot. This represents a 53% decline from the corridor’s peak in Spring 2013 and the lowest since REBNY began tracking data for the corridor in 2008.
- Average asking rents on Broadway & 7th Ave (42nd St. – 47th St.) declined 13% year-over-year to $1,643 per square foot. This represents a 32% decline from the corridor’s peak in Spring 2015 and its lowest point since Spring 2012.
- Average asking rents on 5th Ave (14th St – 23rd St) declined 22% year-over-year to $271 per square foot. This represents a 41% decline from the corridor’s peak in Spring 2017 and its lowest point since Fall 2010.
- Average asking rents on 5th Ave (49th St – 59th St) declined 8% year-over-year to $2,618 per square foot. This represents a 32% decline from the corridor’s latest peak in Spring 2018 and its lowest point since Spring 2011.
- Average asking rents on Broadway (72nd St. – 86th St.) declined 8% year-over-year to $241 per square foot. This represents a 44% decline from the corridor’s peak in Fall 2013 and its lowest point since Fall 2005.
REBNY’S Biannual Manhattan Retail Report is a joint effort by the REBNY Manhattan Retail Advisory Group and the REBNY team. The report provides a snapshot of major retail corridors in the borough based on available ground-floor retail asking rent Information. All data is sourced from the respective firms of each REBNY Manhattan Retail Advisory Group member. The report includes the average price per square foot, median price per square, the lowest price per square foot and highest price per square foot for each of the 17 retail corridors tracked.
Download the complete Fall 2020 Manhattan Retail Report here.