Fall 2019 Manhattan Retail Report




The Manhattan retail market is evolving with an uptick in year-over-year leasing activity despite an increase in retail supply. Outlook remains positive with new operators entering the market and heightened interest in retail spaces. High asking rents have begun to drop, resulting in an uptick in leasing activity and a stabilizing market. Manhattan retail leases in the second half of 2019 were driven by e-commerce proof of concept uses such as food/beverage, service, and medical offices.

Despite traditional storefront retail lessening its footprint, other types of brick-and-mortar uses continue to be in demand as new retailers are becoming more innovative in their uses. Omni-channel retail is effective for digitally native brands that require showrooms to showcase their products/services, which act in conjunction with their e-commerce and marketing efforts. An increased presence of pop-ups and promotional spaces indicate that brands are offering unique in-person experiences to attract both online and in-store shoppers. Other uses such as bookstore cafes and daytime co-working spaces reflect that consumer demand is shifting in favor of modern storefront uses.


In fall 2019, average asking rents for available ground floor retail spaces decreased in 11 of the 17 corridors analyzed by REBNY in its bi-annual Manhattan retail report, compared to the fall of 2018.

In Lower Fifth Avenue, between 42nd and 49th streets, average asking rents declined 9% year-over-year to $852 psf. This drop is attributed to an increased amount of available spaces, as high-end apparel is leaving the corridor in favor of emerging downtown shopping strips. Owners are seeking to fill available spaces at a higher rate by offering short-term lease agreements with the hope of attracting more long-term tenants. Notable new leases include Lululemon, Uggs, Club Monaco, and PUMA. In Upper Fifth Avenue, between 49th and 59th streets, average asking rents declined 5% year-over-year to $2,838 psf. Comparing the two corridors, Upper Fifth Avenue is experiencing slower activity, as no recent deals have occurred. Asking rents are expected to decrease.

In Times Square on Broadway and Seventh Avenue, between 42nd and 47th streets, average asking rents increased 2% year-over-year to $1,889 psf. The retail environment in Times Square is adjusting as new leases primarily consist of food/beverage and experiential retail uses. Owners are willing to cover a greater share of improvements on retail spaces to make it worthwhile for quality tenants. Recent leases consist of Krispy Kreme, JD Sports, and Hard Rock Café.

On West 34th Street, between Fifth and Seventh Avenue, average asking rents declined 8% year-over-year to $528 psf. Compared to Times Square, Herald Square presents a more challenging retail environment with a lower absorption rate and more spaces available on the market. Despite the recent closings of Sephora, GAP and J. Crew, the outlook for Herald Square remains positive with the recent leases by Ulta Beauty, Abercrombie & Fitch, Famous Footwear, and the Century 21 pop-up signing a long-term agreement.

Average asking rents on Madison Avenue, between 57th and 72nd streets, declined 22% to $906 psf compared to the fall 2018. Out of the 17 observed corridors, Madison Avenue experienced the largest year-over-year decline. An increased amount of leases expiring has contributed to the high availability rates that has led owners to lower asking rents and offer more short-term lease agreements. Softening rents has led to increased absorption as recent leases consist of retailers relocating to smaller-sized storefronts with better co-tenancy. Notables tenants such as Akris, Mont Blanc, and Morgane Le Fay indicate that apparel tenants still dominate this corridor.

On East 86th Street, between Lexington and 2nd Avenue, average asking rents declined 11% to $327 psf. This drop is credited to a lack of available prime retail space as current availabilities are located along 2nd Avenue where asking rents are lower and foot traffic is more local. More expensive retail spaces along Lexington Avenue were recently leased by Old Navy and JP Morgan Chase that caused asking rents to artificially inflate.

On Third Avenue, between 60th and 72nd Street, average asking rents remained flat year-over-year at $233 psf. The retail market on Third Avenue remains stable with a large stretch of occupied retail space due to access to public transportation and major retailers keeping and renewing leases nearby. IKEA opening its first Manhattan location on Third Avenue has increased the corridor’s credibility and driven interest from new tenants entering the corridor. In order to fill vacant spaces, owners are becoming more flexible with a steady amount of deal-making occurring with new tenants such as Wells Fargo, TD Bank, and Tudor Salon.

On Columbus Avenue, between 66th and 79th Street, average asking rents remained flat year-over-year at $298 psf. Columbus Avenue is a self-contained and a tight market with low availability. With high residential foot traffic, Columbus Avenue is labeled as a destination location for branded retailers with a diverse mix of tenants composed of smaller-sized storefronts.

In SoHo on Broadway, between Houston and Broome street, average asking rents declined 12% year-over-year to $491 psf. Broadway is composed of loft buildings with large retail spaces that are difficult to subdivide due to historic regulations. Further complications stem from restrictive zoning that places limits on food/beverage uses in SoHo. The decline in asking rents is attributed to post-recession asking rents nearly doubling to historic peaks, as flagship brands were considered ideal tenants capable of affording expensive large retail spaces. As asking rents continue to adjust, Broadway is witnessing increased activity by pop-ups and digitally native brands experimenting with retail space.

On Bleecker Street, between 7th Avenue South and Hudson Street, average asking rents declined 5% year-over-year to $278 psf. Asking rents on Bleecker Street continue to decline from post-recession all-time highs, as lesser foot traffic and a more neighborhood centric retail landscape has caused flagship brands to look for Downtown retail space elsewhere. Bleecker Street has gained new traction with Brookfield Properties filling in its new portfolio of 7 storefronts with a mix of digitally native and e-commerce brands, which has encouraged similar retailers to search for space along the corridor. Examples of new digitally native and e-commerce tenants include LoveShackFancy, Hill House Home, Slightly Alabama, and Bonberi.


The REBNY Manhattan Retail Report Advisory Group includes:

Robin Abrams, Compass

Karen Bellantoni, RKF

Matt Chmielecki, CBRE

David A. Green, Colliers International

Jordan Kaplan, CBRE

Andrew Mandell, Ripco Real Estate

Joanne Podell, Cushman & Wakefield

Fred Posniak, Empire State Realty Trust

Jeffrey Roseman, Newmark Knight Frank

Craig Slosberg, Newmark Knight Frank 

REBNY would like to thank the following firms for their assistance in preparing the report: 



Colliers International

Cushman & Wakefield

Empire State Realty Trust

Newmark Knight Frank

Ripco Real Estate