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Spring 2008 Retail Report
May 15, 2008
Over the last year, the number of major retail corridors attracting high profile tenants has been increasing, according to our Advisory Group. Retailer's interest in these locations continues despite our softening economy. To reflect this dynamic retail market-a market that has benefited from our city's population growth, from the continuing surge in tourism and from the weak dollar-we have added five new corridors to our list of Selected Major Retail Corridors.
These new areas are:
- 86th Street on the Upper East Side
- Columbus Avenue on the Upper West Side
- Fifth Avenue south of 49th Street in Midtown
- Bleecker Street in the West Village
- 14th Street in the Meatpacking District both in Midtown South.
According to our Advisory Group, owners remain optimistic that the favorable market for retail leasing will continue as demonstrated by the rise in asking rents for all retail space in Manhattan. In our selected major retail corridors, we still see high asking rents and a competitive market. Though the volume of activity is strong, tenants appear to be taking a longer time to make a decision and to complete deals.
Average asking rents continue to rise on Harlem's 125th Street, the largest retail corridor in our report. This major commercial street extends from East Harlem through Central Harlem to West Harlem, generally from the East River to the Hudson. Along such a long continuous, corridor there will be variations in ground floor rent. One strong pocket of activity is the stretch west of Lenox Avenue where the highest asking rents are clustered. According, we encourage our readers to pay particular attention to the range of asking rents.
Here are highlights from our Spring 2008 report:
- The average asking rent per square foot (psf) for all Manhattan retail space was up 3% to $111 compared to a year ago.
- In Midtown, the average asking rent was up 9% to $145; in Midtown South, the average asking rent was up 8% to $96, compared to last year.
- The East Side had the highest average asking rent of the major areas at $164, a 6% increase since last spring.
- The Fifth Avenue (49th-59th) corridor had the highest average asking rent of $1,958, with virtually no prime locations immediately available.
- The Madison Avenue corridor had the next highest average asking rent of $1,066, with some stores asking more than $1500 for ground floor space.
- The average asking rents per square foot for ground floor space for the new corridors in the report are:
- 86th Street . . . . . . . . . . . . . . . . . . . . . . .$450
- Columbus Avenue . . . . . . . . . . . . . . . . .$268
- 5th Avenue (42nd-49th Streets) . . . . .$704
- Meatpacking . . . . . . . . . . . . . . . . . . . . .$462
- Bleeker Street . . . . . . . . . . . . . . . . . . . .$397