NEW YORK CITY—The retail market in New York City is down, but certainly not out, according to a report released today by the Real Estate Board of New York.

REBNY in its Spring 2017 Manhattan Retail Report relates that New York City's retail sector is feeling the impact of the national retail sales slowdown and consolidations, but is holding its own due to landlord flexibility on rents and renewed retailer leasing interest that has resulted from the lower rental rates.

“The overall decline in Manhattan average asking rents is attributable to a natural correction from a robust retail market,” says REBNY president John Banks. “Activity, driven by continued retail demand, amenable landlords, and New York City's strong market fundamentals, is countering the effect of difficult national retail conditions, some of which is the impact of e-commerce retail on brick and mortar stores.”

The REBNY report, which is issued twice a year, showed that average asking rents for available ground floor retail spaces fell in 14 of Manhattan's top 17 shopping corridors compared with the spring of 2016.

Not every market suffered rent declines, REBNY notes. For example, the Flatiron District's Fifth Avenue corridor, between 14th and 23rd streets, posted an 18% average asking rent increase, year-over-year, to $456-per square-foot for ground floor retail space. In Lower Manhattan on Broadway, between Battery Park and Chambers Street, the average asking rent shot up 11% to $362-per-square-foot.

SoHo's rent declines recorded in 2016 on Broadway, between Houston and Broome streets, provoked interest from retailers. The corridor's ground floor retail average asking rent leveled off to $812-per-square-foot in the spring of 2017, 1% less than the asking rent reported in the spring of 2016. The average asking rent in Midtown on Fifth Avenue, between 49^th and 59th streets, dropped by 2% to $3,324-per-square-foot.

The surplus of available Eastside retail spaces on Madison Avenue, between 57th and 72nd streets, has been more difficult to absorb and the average retail asking rents in the corridor fell 12% year-over-year to $1,446 per-square-foot, REBNY reports.

In the spring retail report, REBNY states that some of the positives to take out of the current retail market are continued strong retail market fundamentals, more diversity among food tenants, a trend among some e-commerce retailers opening brick and mortar stores, and continued international retailer interest. REBNY adds that those positive influences “have shown that the Manhattan retail environment is too dynamic and should not be included with the pessimistic conjectures about e-commerce's effect on the future of brick and mortar retailing and struggling suburban shopping centers.”

Data for the Manhattan Retail Report was provided by REBNY brokers from the Commercial Brokerage Retail Committee, and comprised of asking rent prices for their current, available ground floor retail listings.

Last fall, REBNY in its Fall 2016 Manhattan Retail report, stated that a slower retail market had taken its toll on average asking rents, and similar to the most recent study, observed at the time that the rent declines have moved some retail tenants off the sidelines.

REBNY's Manhattan Retail Report Advisory Group includes: Robin Abrams of The Lansco Corporation (soon to be at Eastern Consolidated), Karen Bellantoni of RKF, Benjamin Fox of SCG Retail, Andrew Goldberg of CBRE, David A. Green of Colliers International, Andrew Mandell of Ripco Real Estate Corporation, Joanne Podell of Cushman & Wakefield, Fred Posniak of Empire State Realty Trust, Jeffrey Roseman of Newmark Grubb Knight Frank, Craig Slosberg of Jones Lang LaSalle, and Alan Victor of The Lansco Corporation.

NEW YORK CITY—The retail market in New York City is down, but certainly not out, according to a report released today by the Real Estate Board of New York.

Instant Insights /

REBNY: New York City's Retail Market Experiencing 'Natural Correction'

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