New York City -- A report released Wednesday by the Real Estate Board of New York found that New York City’s retail market is continuing to perform well in its traditionally strong retail corridors and primarily residential neighborhoods.
According to REBNY’s Fall 2011 Retail Report, Fifth Avenue has seen the greatest increases in asking rents and demand. Traditionally, Fifth Avenue between 49th and 59th streets experience a competitive market, as they did this period with a 17% increase in the asking rents to $2,633 per sq. ft. since spring 2011 and 11% since fall 2010.
However, said the report, due to such high interest in this corridor, the adjoining corridor of Fifth Ave. between 42nd and 49th streets has seen substantial increases from spillover demand with a 31% uptick to $675 per sq. ft. since spring 2011 and 35% since the same time last year, due in part to the addition of major international retailers such as Swatch, Michael Kors and Dolce & Gabbana.
Herald Square and the Flatiron District have also enjoyed the strength of the Fifth Ave. corridor with asking rents increasing 15% and 9%, respectively, since fall 2010. Recent additions to Herald Square include Spanish retailer Mango, and L’Occitane and a pop-up Uniqlo store have opened in the Flatiron Fifth Avenue Corridor.
The Third Avenue corridor between 60th and 72nd streets and the Madison Avenue corridor between 57th and 72nd streets have attracted interest from big-name fashion retailers with asking rents rising by 4% and 8%, respectively. Anthropologie and Uniqlo recently joined the Third Avenue corridor, and Tory Burch and Bottega Veneta made the move to Madison.
“Tourists continue to visit New York City, and particularly areas such as Fifth Avenue, a world-renowned shopping destination,” said Steven Spinola, REBNY president. “Even in tough economic times, these areas will perform well and will increase demand for adjoining areas, creating a spillover effect.”
Neighborhoods that are mostly residential saw strong upticks in asking rents from stiff competition. According to report findings, the East 86th Street corridor has seen a renaissance with the arrival of a Fairway supermarket driving demand with a 36% increase since fall 2010 and 20% since the spring.
Outside the corridors there is still a limited demand for space. The average asking rent for all available space in Manhattan has declined. The average Manhattan asking rent for all space is $112 – down 3% since spring 2011 and 5% since fall 2010.