Some of Manhattan’s most popular shopping districts such as Madison Avenue, Times Square and Upper Fifth Avenue are seeing record ground floor asking rents even as prices fall on the Upper East and Upper West sides, a semi-annual report from the Real Estate Board of New York shows.
Over the past year, the asking rents for Madison Avenue between 57th and 72nd streets rose by 24 percent to $1,643 per foot, those for Upper Fifth Avenue rose by 16 percent to $3,550 per square foot, and those for Times Square rose by 11 percent to $2,407 per square foot. Those are all record levels since the survey first began in 2000.
“We seem to be in the midst of a vigorous, robust retail real estate market, but it does not necessarily mean that most of the deals are being done at rents that are increasing at that magnitude,” Robin Abrams, executive vice president at Lansco and an advisor on the survey, said.
Meanwhile, asking rents fell by 30 percent over the past year on 86th Street between Lexington and Second avenues on the Upper East Side, and by 4 percent on Broadway from 72nd to 86th streets on the Upper West Side.
There have been retail availabilities on the Upper West Side languishing on the market for a year, and “some landlords reduced the rent because they want to move it,” Abrams said.
The Upper East and Upper West sides have become more locally-focused markets, while “most of the action is Downtown,” she said.
REBNY publishes this report in the spring and fall for 17 of the most active retail shopping areas in Manhattan, from Lower Broadway up to Harlem.
The report’s authors cautioned that the high average asking rents published in the survey can mask a huge variance between the highest and lowest prices being sought on the particular streets. Prices are driven by the most desirable spaces, and a space next door with lower ceilings or other price-reducing characteristics can be much lower.
And like all market reports, there are subtleties of the marketplace that cannot be captured in raw data, Abrams said. For example asking rents in the survey for Soho, which covers Broadway between Houston and Broome streets, rose by 19 percent to $890 per foot this spring.
But in fact some small landlords on Prince and Spring streets — which is not covered by the analysis — have scaled back their asking rents in recent months, several insiders said.
These landlords had increased asking rents in the last year to as much as $1,200 per foot after high-profile spaces such as 529 Broadway, a modest two-story building at the corner of Spring Street which is expected to be demolished and replaced with a modern flagship location, came to market with asking rents above $1,000 per foot.
“A couple of landlords that had product on Prince and Spring who had raised the rents in keeping with other asking rents on the street have reassessed and lowered their asking rents. But they are still high. They lowered to $800 instead of $1,200,” Abrams said.
Many don’t have the patience or the financial wherewithal that the larger landlords often have, and aren’t able to wait until a tenant willing to pay the higher number shows up, insiders said.