Retail rents along the Fifth Avenue corridor between 49th and 59th Streets have surpassed $3,000 a square foot, according to the CBRE Fall 2013 report, “Manhattan Retail Market.”
This story first appeared in the October 17, 2013 issue of WWD. Subscribe Today.
The report said the current average asking rent for the corridor is “$3,150 per square foot, the highest in the country.”
The average asking rent for the Fifth Avenue stretch between 42nd and 49th Streets is $1,082 a square foot, which CBRE noted is up 146 percent from 2009, but “still only one-third of those for retail space just a few blocks north.”
At a presentation Wednesday morning, executive vice president Susan Kurland said she doesn’t anticipate luxury tenants heading below 49th Street anytime soon, although that could be impacted by supply and demand issues regarding space availability. The corridor between 42nd Street and 49th Street is where most of the moderately-priced retailers are located, many of which fall under the category of fast fashion.
The report also said that retailers have been attracted to new developments. Luxury tenants are drawn to the retail space at the World Trade Center and Brookfield Place, the former World Financial Center. Also garnering attention is the new development at Hudson Yards.
Retail executive Andrew Goldberg said there has been an increase in larger sized deals, such as Ralph Lauren’s 38,000-square-foot lease at 711 Fifth Ave. and H&M’s 63,000-square-foot lease at 1 Herald Center. That’s because retailers are investing capital in their real estate to take a bigger market share of retail sales. He also said he expects to see landlords push their second and third floors as retail space from what has typically been used to house offices.
Over at what is known as Herald Square, the space along 34th Street from Fifth Avenue to Seventh Avenue, average asking rents are $738 a square feet, compared with $500 two years ago. The report said a few opportunities have asking rents of $1,000 a square foot, suggesting that average rent for the area is likely to continue to rise.