NEW YORK CITY-Commercial real estate in the Manhattan retail and office sectors continues to boom, as companies continue to pay higher rents and demand space, according to Cushman & Wakefield's quarterly market outlook. "It's definitely a landlord's market," said Joseph Harbart, chief operating officer of the New York Metro area for the firm, at the firm's quarterly update today.
While office leasing during the first quarter was down to five million sf from 5.9 million sf during the same year-ago period, companies are paying higher rents than ever. Average rents in Manhattan climbed to a record $53.43 per sf, while class A rents in Midtown hit an all-time best of $70.77 per sf. Previous highs were sent in the third quarter of 2000.
On the retail front, the area is seeing more demand from both major US chains and international retailers. "Retailers are eager if not anxious to get into this marketplace," Harbart said.
Among the new leases signed during the first quarter in the retail sector Harbart cites are French apparel-chain Anne Fontaine, on Madison Avenue; an Ann Taylor flagship on Fifth Avenue; and two new leases for Crate and Barrel's new CB2 concept.
"The real story in Midtown is definitely pricing," Harbart said. So far this year 18 leases were executed with average rents exceeding $100 per sf, compared to 44 during all of last year.
Additionally, investment sales are getting done at a brisk pace. More than $13.6 billion in transactions have taken place during the first quarter, putting the market on pace to beat last year's record-breaking $34.7 billion. So far, according to Cushman data, another $11.9 billion is under contract.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.