Retail rents in Manhattan fell 11 percent from last fall to this spring, according to a report issued recently by the Real Estate Board of New York, but "new retail tenants are looking at store space in New York for the first time" as "no doubt declining prices are attracting tenants for whom the city is becoming more affordable."
Madison Avenue asking rents declined 14 percent since last fall while Broadway on the Upper West Side fell 5 percent and Fifth Avenue in the 50s dropped 3 percent, according to the report.
Fifth Avenue in the Flatiron District and Broadway in SoHo, however, showed modest gains in the same period.
The report said that its advisory group "see the recent decline in asking rents as an anticipated market correction in a market that was experiencing unsustainable rent growth." It said that an "emerging issue" is "the rise in sublet space."
The report found that the average asking rent on Madison Avenue from 57th to 72nd Street was $979 this spring, compared to $1,143 last fall and $1,066 a year ago. On Fifth Avenue from 49th to 59th Streets, it was $1,631 this spring, compared to $1,675 last fall and $1,958 a year ago. On Broadway from 42nd to 47th Street, it was $1,381 to $775 last fall, and $809 a year ago. In the Meatpacking District, asking rents on 14th Street between 9th and 10th Avenues was $417 this spring compared to $304 last fall and $462 a year ago. In the Financial District, asking rents on Broadway from Battery Park to Chambers Street was $251 this spring, $251 last fall and $198 a year ago.
On June 30, Bloomberg News reported that a study by CB Richard Ellis Group Inc. indicated that "New York city kept its top rank from a year earlier as the most expensive retail market even as asking rents on Manhattan's fifth Avenue fell 10 percent to $1,800 a square foot a year."
That report found that "rents in Hong Kong's most desirable shopping area ranked second at $975 a square foot and Moscow was third at $790" and "Paris and Tokyo followed at $776 and $771, respectively."
Ray Torto, global chief economist for CB Richard Ellis, told Bloomberg that in the United States store rents will "eventually decline 25 percent from the market peak in mid-2008" and retailers in good locations are "negotiating for extended terms or reduced rent."
The article quoted Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail and leasing division that jewelers Richard Mille of Paris and Tous of Madrid are looking for space on Madison Avenue at a rate of about $800 a square foot as indicated that some foreign retailers are taking advantage of lower demand to enter the city's market.
Madison Avenue asking rents declined 14 percent since last fall while Broadway on the Upper West Side fell 5 percent and Fifth Avenue in the 50s dropped 3 percent, according to the report.
Fifth Avenue in the Flatiron District and Broadway in SoHo, however, showed modest gains in the same period.
The report said that its advisory group "see the recent decline in asking rents as an anticipated market correction in a market that was experiencing unsustainable rent growth." It said that an "emerging issue" is "the rise in sublet space."
The report found that the average asking rent on Madison Avenue from 57th to 72nd Street was $979 this spring, compared to $1,143 last fall and $1,066 a year ago. On Fifth Avenue from 49th to 59th Streets, it was $1,631 this spring, compared to $1,675 last fall and $1,958 a year ago. On Broadway from 42nd to 47th Street, it was $1,381 to $775 last fall, and $809 a year ago. In the Meatpacking District, asking rents on 14th Street between 9th and 10th Avenues was $417 this spring compared to $304 last fall and $462 a year ago. In the Financial District, asking rents on Broadway from Battery Park to Chambers Street was $251 this spring, $251 last fall and $198 a year ago.
On June 30, Bloomberg News reported that a study by CB Richard Ellis Group Inc. indicated that "New York city kept its top rank from a year earlier as the most expensive retail market even as asking rents on Manhattan's fifth Avenue fell 10 percent to $1,800 a square foot a year."
That report found that "rents in Hong Kong's most desirable shopping area ranked second at $975 a square foot and Moscow was third at $790" and "Paris and Tokyo followed at $776 and $771, respectively."
Ray Torto, global chief economist for CB Richard Ellis, told Bloomberg that in the United States store rents will "eventually decline 25 percent from the market peak in mid-2008" and retailers in good locations are "negotiating for extended terms or reduced rent."
The article quoted Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail and leasing division that jewelers Richard Mille of Paris and Tous of Madrid are looking for space on Madison Avenue at a rate of about $800 a square foot as indicated that some foreign retailers are taking advantage of lower demand to enter the city's market.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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