The Manhattan retail market saw leasing activity fall nearly 25 percent during the last quarter to 506,000 square feet, though there are signs the sector is steadying.
While leasing and renewal activity fell during the third quarter from 673,000 square feet during the three months prior, the number of ground-floor availabilities on Manhattan’s busiest shopping strips continues to decline from the peak registered earlier this year, according to CBRE.
There were 197 ground-floor availabilities during the third quarter on the 16 major retail corridors the brokerage tracks, falling for the second quarter from the peak of 212 spaces in the beginning of the year, according to CBRE.
The overall average asking rent fell 13.4 percent year-over-year to $711 per square foot.
“The retail market in Manhattan is still finding its new level,” CBRE research director Nicole LaRusso said. “The modest decline in the number of available spaces is a positive sign, though rents continue to decline.”
LaRusso pointed out that availability remains high, and a large portion of new deals – about 20 percent – are short-term leases of three years or fewer. That’s a sign that retailers are cautious about opening new stores in Manhattan.
“Short-term leases are becoming an increasingly important factor in helping to absorb available space,” LaRusso said.
Times Square saw the most activity with nearly 64,000 square feet worth of deals, bolstered by the Madrid-based Parques Reunidos signing a 45,000-square-foot lease at SJP Properties’ 11 Times Square for a Lionsgate Entertainment-themed entertainment center. – Rich Bockmann