By  on April 7, 2010

Retail rents are rising in select Manhattan neighborhoods and space availability is tightening, according to Cushman & Wakefield Inc.

“Though the improvements in many of the core markets have been subtle, they are signaling a return to stability,” Joseph R. Harbert, the real estate firm’s chief operating officer for the New York Metro Region said Tuesday during the company’s quarterly update on commercial real estate.

Only one of the seven retail Manhattan submarkets, or neighborhoods, tracked by Cushman & Wakefield experienced a quarterly increase in space availability. Four had a decrease and two remained stable. Average asking rents for ground floor space increased in five of the submarkets.

In SoHo, asking rents increased $11 compared with the first quarter of 2009 and now average $269 a square foot. Availability of property units for leasing decreased to 11.1 percent from 12.6 percent at the end of 2009.

In Times Square, from Eighth Avenue to Broadway and 42nd to 49th Streets, average asking rents reached $647 a square foot, from $610 at the end of last year. Availability was unchanged at 9.3 percent.

On Third Avenue, from 58th to 79th Streets, rents averaged $242 a square foot at the end of the first quarter, up from $235 a square foot at the end of 2009. Availability fell to 10.5 percent from 11.8 percent at the end the fourth quarter.

Leasing activity is also on the rise. “We don’t have a number on it yet, but we know the business is up — 2010 is above 2009,” said Gene Spiegelman, the company’s executive vice president of retail services.

However, Cushman & Wakefield said that on Madison Avenue, where landlords charged luxury tenants high rents and the recession triggered a wave of closings, average asking rents fell to $827 a square foot from $834 at the end of last year. Madison Avenue’s availability dipped slightly to 12.8 percent, compared with 13 percent one year ago.

Rents also declined on the Upper West Side, to $282 a square foot from $298 at yearend, although availability decreased to 8.4 percent from 9.2 percent. The Upper West Side has seen an influx of new retail, attracting Apple, Brooks Brothers, Uggs, Zara, Lululemon, Kiehl’s, Calypso, Lucky Brand as well as Burberry, which plans to open this year on Columbus Avenue.

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