The Real Deal New York

Retailers rejoice: Landlords are lowering rents to meet the market

REBNY says landlords are getting realistic
December 04, 2018 08:42AM

Missoni on 1009 Madison Avenue (Credit: Aaron Johnson via Google)

Retail landlords are finally lowering their prices.

According to the Real Estate Board of New York’s fall retail report, retail rents have dropped and stabilized, leading to a higher volume of deals, the New York Post reported. In 15 of 17 major shopping corridors in Manhattan, ground floor asking rent declined an average 25 percent when compared to three years ago, according to the report. Bleecker Street between Seventh Avenue South and Hudson Street saw one of the biggest declines from $468 per square foot in 2015 to $293 per square foot in 2018.

“I can’t emphasize enough that ‘rent’ is the four-letter word,” said Joseph Farkas of Metropolitan Realty Associates. “Retailers want to be here, they just [couldn’t] afford the astronomical rents that crept up on them four years ago when three-figure rents [per square foot] became prominent.”

Ripco Real Estate’s Andrew Mandell said retailers along Madison Avenue are enjoying better pricing and fewer competitors, allowing them to scope out the best location on the busy thoroughfare. High-end Italian retailer Missoni, for example, is in talks to move further south along Madison. Some pop-up stores are also looking to open permanent locations.

Outside Manhattan, rents for spaces between 20,000 to more than 40,000 square feet run in the $20s to $30s per square foot. Such “junior” big box tenants in the market for such space include Century 21, iFly, At Home and Pinstripes. [NYP] — Kathryn Brenzel