Amid subway construction, low retail rents on Second Avenue
Despite the noise and dust from the Second Avenue Subway construction, there is a silver lining for retailers looking to set up shop. The Wall Street Journal reported that retail rents along Second Avenue on the Upper East Side have dropped 30 to 40 percent since construction began in 2007.
More specifically, according to Massey Knakal tallies, retail rents are now down to $80 per square foot — in 2007, the amount reached nearly $125. For example, a laundry service named DashLocker opened in June on Second Avenue between 81st and 82nd Streets and, according to unnamed sources to the Journal, the rent was in the high $80-$90 range per square foot. As previously reported, the sizes of this and other Upper East Side DashLocker locations span 250 to 975 square feet and $75 to $100 per square foot.
However, the area still faces its struggles, mainly due to the subway construction. Between 79th and 86th streets on Second Avenue, there are six vacant stores, according to Jay Gilbert, an associated director at Newmark Grubb Knight Frank Realty. Jill Lovat, Massey Knakal’s director of retail leasing, said there’s a 25 percent vacancy rate between 72nd and 96th streets.
There’s hope that these low rents will help reestablish the Upper East Side as a cool neighborhood. Jason Pruger, an executive managing director at Newmark, told the Journal he predicts rents will rise 20 percent from peak levels once the 63rd to 96th Street portion of the subway opens up. [WSJ] — Zachary Kussin