Merchants gaining more leverage over landlords in Manhattan

Plummeting retail occupancy rates have Manhattan landlords in a generous mood.



According to a Bloomberg report, Manhattan landlords are offering their retail clients such giveaways as interior redesigns and moving expenses to keep storefronts from going dark.



“We’re seeing tenant-improvement and concession packages that retail landlords never, ever contemplated before,” said Steve Soutendijk, an executive director at brokerage Cushman & Wakefield Inc., in the report.



The move comes after landlords pushed leasing costs in certain parts of Manhattan to record highs, particularly on Fifth Avenue (from 49th to 60 streets), during the past five years.



But a number of factors, including a strong U.S. dollar that cut into tourist spending, tepid demand for luxury goods and the growth of online, have made retailers more cautious about the cost of setting up shop in Manhattan. Space availability on Fifth Avenue is at a record high, the report said.



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