After an overall strong second quarter, Manhattan’s prime shopping corridors showed mixed results last quarter with rents falling or remaining flat and vacancy rates climbing in more than half the districts tracked, a new report from commercial services firm Cushman & Wakefield shows.
Of the seven districts covered in the report, asking rents fell or were flat in three, and vacancy rates rose in four, the Manhattan retail report indicates.
Prices fell the most in Times Square, where they dropped $40 per foot to $651 per square foot. That was in part because sunglass and sports retailer Oakley signed a lease at 1515 Broadway reported to be $1,400 per square feet for about 1,800 square feet of ground-floor retail last quarter. With the removal of the above-market space, the overall asking rents fell, the report says. The shopping district where the vacancy rates rose the most was upper Fifth Avenue between 49th and 60th streets, where it jumped 1.5 points to 8.1 percent, the Cushman reports show.
The strongest district was lower Fifth Avenue, between 42nd and 49th streets, which was the only stretch to show both growth in asking rents and a decline in vacancy rates. Asking rents rose $87 per foot to $501 per foot, while the vacancy rate dipped .15 points to 6 percent, the figures show. The largest new lease there was Urban Outfitters, which leased 25,866 square feet at 521 Fifth Avenue.
But brokers remained confident in Manhattan retail, noting the healthy growth in certain areas.
“Generally speaking, the markets are strong,” said Joanne Podell, a retail broker and executive vice president at Cushman. She noted that in Soho, where the vacancy rate fell .9 points to 9 percent, there were only a few spaces available, and spots were leasing up quickly.
Podell was bullish on Times Square as well, despite a slight rise in the vacancy rate, which rose .5 points to 9.3 percent on top of the decline in asking rents. To illustrate the demand, she said that for a new retailer to elbow into the high-traffic area, an existing store agreed to relinquish its space after its lease was bought out.