Manhattan's Retail Corridors See Peak Rents

NEW YORK CITY-Fifth Avenue and other prime shopping corridors in Manhattan have seen asking rents reach peak levels over the past six months, the Real Estate Board of New York said Wednesday in its Fall 2013 Retail Report. They've been pushed up by rising demand and competition for space.

“We're seeing growing diversity in the tenant base in Manhattan's prime retail corridors,” says REBNY president Steven Spinola. “This is keeping the market healthy and strong, while adding to the character of the neighborhoods. Our advisory group reported strong demand in many locations driving the asking rents so high in these areas that even more established retailers are returning to the more traditional corridors where customer demand has been well tested.”

Although the Fifth Avenue corridor between 49th and 59th streets boasts the city's highest ground-floor asking rents at $3,170 per square foot, it was the Financial District that saw the biggest year-over-year increase on a percentage basis. The span of Broadway between Battery Park and Chamber Street averaged $257 per square foot, a 69% gain from 12 months ago.

Other big Y-O-Y gainers among Manhattan retail corridors included the Madison Avenue corridor from 57th to 72nd Street, up 42% Y-O-Y to $1,380 per square foot; the Soho Broadway Corridor, up 41% to $762 per square foot; the Westside Broadway corridor, with a 38% increase to $434 per square foot; and the Flatiron Corridor, where average rents have risen 47% to $400 per foot since last fall. The REBNY report notes that the proliferation of luxury residential construction along the 57th Street corridor will provide both supply of and demand for modern retail.

REBNY's Retail Report compiles data about asking rents for available space from a broad cross-section of the city's leading retail brokers. The report is issued in the spring and fall each year.