Stratospheric retail rents predicted to continue rising

New York /
Jan.January 03, 2014 03:01 PM

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


Related Articles

arrow_forward_ios
Clockwise from top left: 312 West 34th Street, 61 North 9th Street, 639 Classon Avenue, and One Fulton Square (Credit: Google Maps)
These were the top 10 NYC retail leases in July
These were the top 10 NYC retail leases in July
From top, clockwise: Cushman & Wakefield's Joanne Podell, Showfields' Amir Zwickel, Appear Here's Josh Yentob, Brookfield Properties's Mark Kostic (Credit: Getty, LinkedIn)
When it comes to retail, “real estate in New York is fundamentally broken”
When it comes to retail, “real estate in New York is fundamentally broken”
50 Pennsylvania Avenue (LinkedIn, Pennrose)
Supermarket nabs 20K sf at Pennrose project in Brooklyn
Supermarket nabs 20K sf at Pennrose project in Brooklyn
Hale and Hearty's Simon Jacobs and 111 Fulton Street (LinkedIn, Hale and Hearty, Getty, Streeteasy)
No soup for you: Hale and Hearty appears to bite the dust
No soup for you: Hale and Hearty appears to bite the dust
From left: Brivo's Steve Van Till and Crown Proptech's Richard Chera (Getty, LinkedIn/Steve Van Till, Crown Proptech)
Chera family fails to raise cash for Brivo proptech merger
Chera family fails to raise cash for Brivo proptech merger
L3 Capital co-founder Domenic Lanni and 91 North 6th Street in Williamsburg (L3 Capital, GBuilders Construction, Wikipedia/Gr1st, iStock)
Hermès leases Williamsburg outpost in Brooklyn debut
Hermès leases Williamsburg outpost in Brooklyn debut
Kohl's CEO Michell Glass (Kohl's, iStock)
Kohl’s looking to cash in on $8B real estate portfolio
Kohl’s looking to cash in on $8B real estate portfolio
A photo illustration of Times Square (iStock)
Retail asking rents show signs of recovery
Retail asking rents show signs of recovery
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...