The holidays are typically a bright spot for retailers, but with little foot traffic returning to Manhattan, the fourth quarter of 2020 was instead filled with uncertainty and distress.
The average retail asking rent in Manhattan’s 16 retail corridors dropped nearly 10 percent year over year to $652 per square foot, according to a new report by CBRE. That’s a slight drop from Q3’s $659 per square foot, marking the lowest rents have been since 2011.
In some neighborhoods, rents were slashed nearly in half. On Prince Street in Soho, asking rents fell from $719 to $423 per square foot year-over-year.
But while the pandemic accelerated the trend, rents have been falling progressively over the past five years, according to a recent REBNY report. The CBRE report notes that Q4’s numbers represent the 13th quarterly decrease in average asking rents.
Additionally, for the sixth quarter in a row, leasing velocity has been spiraling. The number of available ground-floor storefronts jumped 3.9 percent, from 254 to 264 — which is a new high for availability in the borough, according to CBRE.
However, there were a few bright spots. Retail spending was up, with quarterly sales increasing 8.6 percent to $35.4 billion. The unemployment rate dropped roughly 4 basis points to 12.1 percent.
And several big leases were signed in the fourth quarter. Home Depot inked a 20-year lease to take over more than 100,000 square feet on the Upper East Side that was previously occupied by Bed Bath & Beyond. Target similarly secured a new 20-year, 55,000-square-foot lease at a space recently vacated by Barnes & Noble on East 86th Street.