One of the city’s best known shopping districts is starting to look a little like a ghost town (relatively speaking).
Experts point to climbing rents in the district as one of the driving forces behind the glut of open space. Spaces along Fifth Avenue from 49th to 60th streets — one of the priciest retail locations in the world — have an average asking rent of $3,213 a square foot, Bloomberg reported. In 2011, asking rents were $2,075 a square foot on the stretch.
Empty storefronts are plaguing much of Manhattan, as rents rise and retailers struggle to compete with e-commerce and demand wanes for luxury products.
“Property trades are being based on achieving ever-higher rents, and nobody ever really looks at what retailers can afford to pay,” Richard Hodos, a vice chairman at brokerage CBRE Group, told Bloomberg. “In some cases, rents need to come down 30 percent or more for rents to be at levels where retailers are able to make sense of them again.”
In July, The Real Deal profiled the mounting concern over Manhattan’s retail market amid growing rents, struggling stores and increasing availability rates throughout the borough. But some landlords are starting to lower their expectations. For example, asking rents in Soho and Times Square have declined throughout 2016, according to Cushman’s data. [Bloomberg] — Kathryn Brenzel