Average asking rents are continuing to climb in some major Manhattan retail corridors due to high demand and a limited availability of space, according to the Real Estate Board of New York’s fall Manhattan retail market report, which was released today. Overall in Manhattan, however, asking rents were down 4 percent from the spring and 2 percent year-over-year due to prime spaces already being occupied by tenants.
One of the areas that stands out is lower Fifth Avenue, between 42nd and 49th streets. In fall 2012, average asking rents ticked in at $1,021, up 13 percent from the spring 2012 figure of $900 and a cool 51 percent increase from the same period last year when the average came in at $675. Another area that saw increases was the Meatpacking District, which covers 14th Street between Ninth and 10th avenues. This fall, the average asking rent was $469 — up 25 percent from the spring and 28 percent year-over-year.
“With increased competition for the fewer prime spaces available in key locations, rents in those areas are at all-time highs,” said REBNY President Steven Spinola in a statement. “We believe the lack of more prominent spaces on Fifth Avenue between 49th and 50th streets has led to a softening of the boundaries of this retail corridor. High-profile tenants are willing to consider space immediately south along Fifth Avenue, which has heavy tourist foot traffic.”
The Flatiron stretch of Fifth Avenue — between 14th and 23rd streets — saw average asking rents rise to $350. This marks a 16 percent price increase from the spring and 25 percent from fall 2011.
On the other hand, there were decreases in other corridors. The Madison Avenue stretch between East 57th and East 72nd streets, which in the fall posted a $973 average ask, declined 19 percent from the spring and 2 percent from last fall.
Broken down by neighborhoods, the Upper East Side posted the largest year-over-year decline in average rents — slipping to $143 from $176 last fall. Tech-filled Midtown South, on the other hand, saw a 7 percent year-over-year rise to $108 from $98 last fall.
All of the information was compiled before Hurricane Sandy made landfall three weeks ago.
“While some of the retail corridors were in areas impacted by the storm, our advisory group believes in the long-term this will not deter retailers from wanting to open or operate stores in these areas as the strength of the market and the desirability of New York City supersedes any temporary store closings in affected neighborhoods,” Spinola said. — Zachary Kussin