Retail Rents Rise in Most NYC Markets

NEW YORK CITY—The Real Estate Board of New York reports that the overall average asking rent for retail ground floor space throughout Manhattan is now $149-per-square foot, up from $130-per-square-foot recorded in the fall of 2013.

REBNY in its Fall 2014 Retail Report states that rents in 13 of the 17 retail corridors in Manhattan saw increases in rent year-over year. The average asking rent for ground floor space on Fifth Avenue, between 49th and 59th streets, increased 8% year-over-year to $3,420 per-square-foot, and is the highest asking rent of any Manhattan retail corridor. In the Times Square market along Broadway and Seventh Avenue and between 42nd and 47th streets, average ground floor asking rents rose by 7% over the last year to $2,317 per-square-foot.

Other prime retail markets in Manhattan also saw rent increases. For example, along Madison Avenue between 57th and 72nd streets, the average asking rents rose by 24% from last year to $1,709 per-square-foot. In the Flatiron District along Fifth Avenue between 14th and 23rd streets, asking rents increased by 23% to $403 per-square-foot year-over-year. In Herald Square along West 34th Street, average asking rents grew by 21% 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,” says REBNY president Steven Spinola. “Continued growth in retail demand and diminishing supply are driving up asking rents, particularly along Madison Avenue and around Herald Square.”

Spinola says retail brokers tell REBNY of another emerging trend where “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.”

Major deals over the last year that lend credence to that theory include: 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 St. and Neiman Marcus's first New York City store in development at Hudson Yards.