REBNY RETAIL REPORT FALL 2015
RETAIL REPORT FALL 2015
The Manhattan retail leasing market finally saw some softening of ground floor asking rents in its premier corridors in the fall of 2015. The Fall 2015 REBNY Retail Report showed ground floor asking rents increasing in only 10 of 17 corridors surveyed, year over year. The upside of the break in rent increases though, according to our Retail Advisory Group, is that more deals are getting done and retailers are coming back to the market. While the average asking rent in a majority of the corridors increased compared to last year, the increases were more modest compared to previous reports. Although the number of asking rent decreases in corridors were greater than in any of our recent reports, none of the decreases in asking rent were more 6 percent.
The most notable decrease was in the Madison Avenue between 57th-72nd corridor. The average asking rent in the corridor fell 6 percent from $1,700 psf for ground floor space in Spring 2015 to $1,613 in Fall 2015. According to our brokers this corridor is symbolic of current trends. The decrease in the average asking rent is not due to overall weakness or less interest in the corridor, but instead is due to the amount of supply available in the corridor and landlords becoming more realistic in setting an asking rent. Broadway on the Upper West Side is another example of a corridor where a lot of space came to the market leading to a softening of asking rents while the neighborhood fundamentals have not changed. The average asking rent for ground floor retail space on Broadway between 72th and 86th decreased four percent year on year to $361 psf. In fact, there was in increase in supply in all of the corridors where rents fell except for one.
The corridors with more strength continue to be where there is an increase in residential development and a resurgence of neighborhood vitality. The financial district is one of these corridors. The area has undergone a lot of change recently with infrastructure upgrades such as the Fulton Transportation Hub, new shopping areas and dining options around the World Trade Center and the addition of Brookfield Place. The transformation of the office tenancy in the area to more TAMI tenants has led to more people mingling in the area after work. Ground floor retail asking rents along the Broadway Financial District corridor increased 16 percent from last fall to an average of $308 psf……The Full Report