Tourism, proximity to major attractions and transportation and retailers’ desire to situate their luxury and global brands in elite, high-traffic areas drove retail rents up along 13 of 17 Manhattan shopping corridors surveyed in The Real Estate Board of New York’s (REBNY’s) Fall Retail Report.
The average asking rent for ground floor space on Fifth Avenue, between 49th and 59th streets, increased eight percent year-over-year to $3,420 per square foot, and was the highest asking rent of any Manhattan retail corridor.
In Times Square, along Broadway and Seventh Avenue and between 42nd and 47th streets, average ground floor asking rents rose by seven percent over the last year to $2,317 per square foot.
Other primary shopping corridors with significant ground floor asking rent increases this fall include:
• Madison Avenue between 57th and 72nd streets where average asking rents rose by 24 percent from last year to $1,709 per square foot.
• Flatiron along Fifth Avenue between 14th and 23rd streets, where asking rents increased by 23 percent to $403 per square foot year-over-year.
• Herald Square along West 34th Street, where average asking rents grew by 21 percent to $891 per square foot.
“Higher retail rents have become concentrated around major attractions like the World Trade Center campus and Macy’s flagship store, which maintain high visibility and foot traffic,” said Steven Spinola, REBNY president. “Continued growth in retail demand and diminishing supply are driving up asking rents, particularly along Madison Avenue and around Herald Square.”
“The city’s leading retail brokers who comprise our retail advisory group also tell us that retailers are increasingly looking to have a hand in shaping the City’s vibrant retail landscape in order to drum up excitement around their growing brands,” added Spinola.
Notable activity over the past year included the announcements of Saks Fifth Avenue’s move to Lower Manhattan, Amazon’s lease for its first ever brick-and-mortar retail space along West 34th Street, Nordstrom’s new store at the future 225 West 57th Street, and Neiman Marcus’s first New York City store coming to Hudson Yards.
Overall average asking rent for retail space (ground floor and other) throughout Manhattan was $149 per square foot, up from $130 per square foot in Fall 2013.