Retail rents jump in most Manhattan shopping corridors: REBNY
Global luxury is leading the way, with tourism and foot traffic on rise
Retail asking rents are on the rise in Manhattan, but there’s still a ways to go before they resemble pre-pandemic levels.
The average asking rent increased year-over-year in 2023’s second half across 12 of the 17 corridors tracked by the Real Estate Board of New York, according to its recent report. Sustained activity was a welcome development for the sector, but the average asking rent remains below pre-Covid levels in most areas.
In almost every corridor, average rent is 20 to 30 percent lower than it was four years earlier, hindered by straggling tourism and office visitation numbers.
The steady nature of the second half of the year is building cautious optimism for 2024, according to the report.
“With slow but steady growth in tourism activity, commuter foot traffic and office visitations, retailers are absorbing larger footprints and landlord concessions are becoming less common,” said REBNY executive Keith DeCoster.
Some corridors are seeing plenty of competition for leases, including Soho, Madison Avenue and Flatiron. Activity is also on the rise in Times Square, Upper Fifth Avenue and Midtown East.
Global luxury is holding up Manhattan’s top retail corridors. In recent months, British bootmaker John Lobb moved to 700 Madison Avenue — albeit from another Madison Avenue address — while Dolce & Gabbana leased the former Hermes Women’s Store at 693 Madison Avenue.
Many luxury retailers are also proving to be unafraid of taking big swaths of space by refusing to subdivide locations, instead building out stores that feature amenities such as art exhibits or cafes.
Louis Vuitton clocked in at number 6 in the ranking of largest retail leases in Manhattan last year. The luxury fashion brand signed a deal for 36,000 square feet at 6 East 57th Street in the Plaza District, part of a shuffling of stores by its parent conglomerate.
Last month’s largest retail lease belonged to kosher restaurant Barnea Bistro, according to a previous analysis by The Real Deal. The tony eatery signed a 15-year lease at 114 West 47th Street for 7,600 square feet.