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Manhattan retail rents hit 17-year low
Soho saw asking rent dropped by one-third compared to last year
Just in time for Black Friday, a new report says Manhattan’s retail rents are at their lowest point in 17 years.
Soho rents have plummeted by more than a third since 2015, according to the Real Estate Board of New York, which said demand for brick-and-mortar retail has tanked due to the shift toward online shopping. A recent analysis by The Real Deal found large swaths of the area are sitting vacant. According to REBNY, while deals are getting done, “they favor parties willing to be flexible with deal structure, uses, and asking rent.”
The steepest drop was on Bleecker Street between Seventh Avenue and Hudson Street, which saw a 25 percent drop in average asking rent to $351 per square foot. “The brokers really thought the rents overshot the neighborhood,” Brian Klimas, REBNY’s chief research economist, told the New York Post.
Other hard-hid corridors include Soho, where asking rents peaks at $977 per foot in 2015 and are now 34 percent lower, at $644 per foot. On Madison Avenue between 57th and 72nd Streets, asking rents peaked at $1,709 per foot in 2014 and are now 27 percent lower at $1,348. And in Herald Square, asking rents have dropped 15 percent since last fall to $633 per foot.
Some areas saw rent increases, such as Fifth Avenue’s Gold Coast, where average asking rents are $3,900 per square foot. That compares to an average of $3,683 per foot in 2015.
Tenants are still getting good deals — like work on the premises or longer free-rent periods. Some stores, like American Girl, which opened at 75 Rockefeller Plaza, are offering “experiential retail.” Some online-only retailers are experimenting with physical storefronts and pop-up shops.
There were a few bright spots in the REBNY report: Asking rents on Broadway in the Flatiron were $384 per foot, up 10 percent compared to the spring’s average of $348 per foot. In Times Square, asking rents jumped 9 percent since last spring to $2,100 per foot. Brokers said that’s thanks to longer selling hours, LED signs and ample foot traffic. [NYP] — E.B. Solomont