FLATIRON — Retail rent prices fell in almost all of Manhattan's major shopping corridors over the past year — except for Fifth Avenue in the Flatiron District, where rents actually increased, according to a new report by the Real Estate Board of New York.
Between the spring of 2016 and this spring, average asking rents for ground-floor retail space declined in 14 of 17 top Manhattan corridors, but rose on Fifth Avenue between 14th and 23rd streets by 18 percent — from $390 per square foot to $456 per square foot, the study states.
Midtown's Fifth Avenue corridor, from 49th to 59th streets, remained somewhat stable, with the average asking rent falling by just 2 percent year-over-year to $3,324 per square foot, according to the report.
Some neighborhoods are feeling the slowdown in national retail sales more than others, the study states.
Madison Avenue between 57th and 72nd streets, which counts a slew of high-end shops, saw its average retail asking rents fall by 12 percent to $1,446 per square foot. Real estate agents attributed the drop to the surplus of available retail spaces there, creating less demand.
Credit: REBNYREBNY attributed the decrease in 14 of the retail corridors to the market fixing itself.
"The overall decline in Manhattan average asking rents is attributable to a natural correction from a robust retail market,” said John Banks, REBNY's president.
The decline in asking rents has sparked interest for retailers, however, and it seems that the Manhattan market is "staying afloat" because landlords are repositioning their properties to lure businesses back, according to REBNY.
“Activity, driven by continued retail demand, amenable landlords, and New York City’s strong market fundamentals, is countering the effect of difficult national retail conditions, some of which is the impact of e-commerce retail on brick and mortar stores,” the report says.
More diversity among food tenants, trends among e-commerce retailers opening physical stores, and continued international retailer interest have also shown that the Manhattan market "is dynamic and should not be included with the pessimistic conjectures about e-commerce’s effect on the future of brick and mortar retailing and struggling suburban shopping centers," the report adds.
(Credit: REBNY)
