Retail rents keep declining in New York, and the city’s poshest neighborhoods are not exempt. In fact, they are among the hardest hit.
The most expensive real estate in Manhattan is on Fifth Avenue around the Plaza Hotel, where rents dropped by 13.5 percent from the first quarter to the second quarter this year, according to Bloomberg’s analysis of a CBRE Group report. This was the largest decline out of the 16 neighborhoods the company tracks.
The discount store Five Below recently signed a lease for 530 Fifth Avenue, but multiple retail brokers told The Real Deal they did not see this as an indication that the famed shopping destination would become a haven for discount stores.
Manhattan has seen 143 retail spaces stay vacant over the past year, and landlords have lowered rents on more than half of them.
However, the pace of declines might be at least starting to slow down. Average asking rents dropped by 12.1 percent in the second quarter of 2018 compared to the second quarter of 2017, hitting $658 per square foot. In the first quarter of the year, the annual decrease was 19.5 percent.
The food and beverage industry was the most active in the second quarter, with 97,338 square feet worth of leases across 29 deals. Apparel was in second place with 74,888 square feet across 14 deals. Puma’s roughly 21,000-square-foot lease at 609 Fifth Avenue was the largest in this category. [Bloomberg] – Eddie Small