Retailers experience another drop in asking rents

Average asking prices in 13 shopping districts are down almost 20 percent

CBRE's Andrew Goldberg and stores in the Meatpacking District (Credit: CBRE and Getty Images)
CBRE's Andrew Goldberg and stores in the Meatpacking District (Credit: CBRE and Getty Images)

Retailers who have balked at soaring Manhattan rental costs may have noticed some reprieve this year, with reported asking prices dropping by almost a 20 percent across most shopping districts in the city.

The average price of ground-floor retail rental space dropped by 19.5 percent in 13 of 16 shopping districts in the first quarter of the year, a significant fall from last year’s average $653 per square foot, according to The Wall Street Journal.

The figures come at a time when merchants are fending off the rise of online shopping, and fewer retailers are seeking out physical shopfronts. Average rental prices in the Meatpacking District’s Washington street, between 14th and Gansevoort streets, fell to $490 per square foot, down from $623, the publication reported, citing a CBRE report.

“I think we will start to see some more of the savvier tenants of companies realize we’re starting to get to a point where they can drive some good deals for themselves,” Andrew Goldberg, CBRE’s vice chairman, told the Journal

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The 20 percent drop follows similar reports at the beginning of the year, when average asking rents in Manhattan’s 16 retail corridors dropped by 18.4 percent year-on-year in 2017.

Another report, released earlier this month by Cushman & Wakefield, found that 10 out of 11 Manhattan shopping districts saw asking rents decline over the past year.

It also noted that the city’s most expensive retail rentals, on Fifth Avenue between 49th and 60th streets, were down to an asking average of $2,592 per square foot during the first quarter of the year from $3,188 per square foot during the first three months of 2017. [WSJ]David Jeans