It helps, but with the economy still volatile and unsteady, even location isn’t a guarantee that retail rents in Manhattan’s top shopping corridors will rise.
Asking rents declined in 11 of 16 prime retail districts between fall 2008 and fall 2009, according to a new survey by the Real Estate Board of New York, a 12,000-member group representing commercial and residential property owners, builders and brokers, among others.
Overall average asking rents for retail space in Manhattan fell 9 percent to $117 a square foot from fall 2008 to fall 2009, the report said.
The biggest hit was in the 34th Street-Herald Square area, between Fifth and Seventh avenues, one of the city’s busiest commercial zones, which dropped 35 percent to $421 a square foot. Asking rents in the Financial District on Broadway, between Battery Park and Chambers Street, declined 25 percent to $189, followed by 24 percent decreases on East 86th Street, between Lexington and Second Avenues, to $363, and on Columbus Avenue, between 66th and 79th Streets, to $229.
On the upside, asking rents on Fifth Avenue, between 49th and 59th Streets, home to Bergdorf Goodman, Tiffany & Co., Giorgio Armani, Louis Vuitton and other luxury retailers, rose 46 percent to $2,050 a square foot. Meatpacking District rents increased 23 percent to $375; SoHo gained 12 percent to $483, and asking rents in the Times Square area, on Broadway and Seventh Avenue, between 42nd and 47th Streets, increased 6 percent to $821.
“The global economy continues to have an impact on asking rents for retail space this fall,” said Steven Spinola, president of REBNY, who added stores that had been “priced out of the market now have an entry point for the first time in years.”
Despite overall declines, Spinola cited evidence of “solid activity” in the market.
In the Herald Square area, for example, this year has seen the openings of J.C. Penney’s first Manhattan flagship, as well as Aéropostale’s first street-front flagship in the city, along with Geox and soon, Esprit.
Tommy Hilfiger launched a flagship at Fifth Avenue and 54th Street in September, and Giorgio Armani opened a flagship at Fifth Avenue and 56th Street in March. However, Fifth Avenue also has stores of 10,000 square feet and up that are empty, including spaces formerly occupied by Brooks Brothers, the Disney Store and Escada. Topshop and Uniqlo were said to have interest in the vacant locations.
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