NYC Retail Rents On the Decline Amid Robust Leasing Activity
The innovation of traditional brick-and-mortar for pop-ups have emphasized in-person experiences and driven up foot traffic in areas, but have changed the traditional lease structures for cheaper rents.
NEW YORK CITY – Asking retail rents per square foot have fallen throughout the city’s retail corridors, while leasing activity remains robust, in what the Real Estate Board of New York deems as a multi-year market correction, according to REBNY’s Fall 2019 Manhattan Retail Report.
In Manhattan, the retail market continues to adjust to changing sector trends. High asking rents continue to drop, resulting in an uptick in year-over-year leasing activity. Trends such as the innovation of traditional brick-and-mortar for pop-ups and promotional spaces for online marketing efforts have emphasized in-person experiences and driven up foot traffic in areas, but have changed the traditional lease structures. Often times tenants are taking up less space in shorter times frames and for cheaper rents, the data shows.
“Our report found that declining rents present opportunities for a growing number of pop-up and experiential storefronts,” said James Whelan, REBNY president, in a prepared statement. “Prospective long-term tenants remain selective, yet activity continues to be strong in today’s market.”
Retailers are also creating daytime co-working spaces and bookstore cafés to create modern storefronts to satisfy new consumer demand. Overall, the retail market outlook remains positive with new and existing operators stockpiling experiential concepts, which is expected to buoy the sector in the upcoming years.
GlobeSt.com recently reported on the optimism around retail as the sector continues to show promise with the deployment of innovative concepts and the push from e-commerce retailers to have an omnichannel platform, opening brick and mortar stores.