Five Manhattan Retail Corridors See Rents Jump Over 10% in Q1
The Real Deal
May 18, 2015
by Tess Hoffman
|Herald Square. Photo credit: 34th Street Partnership|
Five of Manhattan’s hottest retail corridors saw asking rents get double-digit percentage increases year-over-year, with two of them rising over 20 percent, according to CBRE’s retail report for the first quarter of 2015.
In Herald Square, 34th Street from Fifth to Seventh avenues saw rents rise 22.4 percent year-over-year to $988 per square foot, while Fifth Avenue from 42nd to 49th streets saw a year-over-year increase of 22.3 percent to $1,338, according to the report.
Other corridors with sharp increases were Third Avenue on the Upper East Side from 60th to 72nd Streets, where asking rents rose 19 percent to $333 per foot, Broadway from 72nd to 86th Streets on the Upper West Side, which was up 15 percent to $375, and 14th Street in the Meatpacking District from Eighth to 11th avenues, up 11 percent to $394.
The priciest stretch of retail in Manhattan — and the world — is Fifth Avenue from 49th to 59th streets, which boasts average asking rents of $3,617 per foot, up 3.3 percent from last year.
The report noted that CBRE is now tracking five newly-prominent retail corridors: in Flatiron, Broadway between 14th and 23rd Streets; in Soho, both Prince and Spring streets between Broadway and West Broadway; and in the Meatpacking District, along Washington and Gansevoort streets.
Rents along Prince and Spring streets in Soho, which cater to luxury retailers seeking beautiful cast-iron storefronts on cobblestone streets, now exceed those along neighboring Broadway. Broadway rents averaged $853 per foot in the first quarter, while Prince Street averaged $1,038 and Spring Street averaged $1,031. Wooster Street, also a growing shopping stretch in the neighborhood, now has rents ranging from $200 to $600, though the report says those can be expected to climb as the tenant mix improves.
A newly-released first-quarter retail report from the Real Estate Board of New York that focuses on ground-floor retail rents found that asking rents on East 57th Street between Fifth and Park avenues saw a whopping 60 percent increase to $1,600 per foot.
Corroborating the CBRE report, REBNY also saw massive increases in ground-floor retail rents on the Upper East Side’s Third Avenue and Broadway on the Upper West Side.
The only retail corridor REBNY surveyed that saw ground-floor average asking rent fall was Bleecker Street in the West Village, which experienced an 8 percent decline to $481 per foot.
REBNY attributed the healthy rent increases to employment growth — private sector employment in the city has grown 3 percent in the past year — as well as increased tourism and upbeat consumer sentiment.