Retail real estate data indicated a mixed bag for Manhattan businesses this fall, as asking rates for storefront space fluctuated wildly across the island. The report showed that some neighborhoods declined, correcting from all-time high rates, while others fared better. The borough’s most venerated high-end shopping neighborhoods are holding on, even in the rough economy, with surprisingly strong numbers, according to the Fall Retail Report released today from the Real Estate Board of New York. Overall average asking rents for Manhattan retail space dropped 9 percent to $117 per square foot.
The Fifth Avenue shopping corridor between 49th and 59th streets saw average asking rents for ground-floor retail space at $2,050 per square foot this fall, up 46 percent from fall 2008, while asking rates in the Meatpacking District went up 23 percent to $375 per square foot, and Soho rates jumped 12 percent to $483 per square foot.
The rates run contrary to widely reported negative news on retail lease rates in the city.
Other key shopping regions, including Times Square and Seventh Avenue between 42nd and 47th streets, saw moderate year-over-year increases in their average asking rents for autumn this year as well, according to the report.
Even with this strong performance, other key shopping regions suffered. Average asking rent for ground-floor retail space in Herald Square dropped 35 percent to $421 per square foot, according to the report, marking the biggest percentage decline of all the neighborhoods surveyed. The Financial District’s shopping corridor saw average rates drop 25 percent to $189 per square foot, while asking rent on Columbus Avenue between 66th and 79th streets declined 24 percent to $229 per square foot.
Steven Spinola, president of REBNY, said that the declining asking rents in some neighborhoods may be the result of a delayed economic impact from the recession.
“Clearly it has taken time for the recession’s impact to be reflected in the retail asking rents,” Spinola said. He added that the decline in average asking rents might not be all bad news, however, noting that “retailers that were formerly priced out of the market now have an entry point for the first time in years.” TRD