As European fashion houses and high-end newcomers remain undeterred by rising retail rents, rates are expected to continue their skyward climb in 2014.
Along fashionable Madison Avenue, particularly the stretch from East 52nd Street to East 72nd Street, rents now average $1,380 per square foot — a 42 percent rise from the fall of 2012, according to data from the Real Estate Board of New York, cited by Crain’s. Fifth Avenue retail spots are topping $3,100 per square foot for the first time, and Times Square rates have stretched as high as $2,175 per square foot between West 42nd and West 47th streets, between Broadway and Seventh Avenue, REBNY said.
“I expect the rents not only not to go down, but to climb a little more,” Faith Hope Consolo, chairman of retail leasing at Douglas Elliman, told Crain’s. “If this momentum continues, in the first quarter we’ll see a 5% to 7% increase.”
For posh brands such as French clothier Kering and LVMH Moet Hennessy Louis Vuitton, top-dollar rates for prominent locales are well worth the extra cost, Robert Futterman, who runs the brokerage firm RKF, told Crain’s.
“It’s not just for a flagship, it’s a marquee for the brand,” he told Crain’s. “You can chalk up part of the rent to advertising and marketing.”
High rents along trendy avenues is also making less-prominent spots increasingly viable options, such as areas south of $600-per-square-foot Soho and an increasingly active Lower Manhattan. [Crain’s] — Julie Strickland