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Retail rents fall along Manhattan's Fifth Avenue, Madison Avenue shopping corridors

Retail rents fall along Manhattan’s Fifth Avenue, Madison Avenue shopping corridors

Empty storefronts along some of Manhattan’s best-known shopping corridors has landlords lowering rents.

A report Wednesday from the Real Estate Board of New York found that average asking rents for ground-floor retail spaces this spring are down from in 12 of Manhattan’s 17 commercial corridors, compared to the same point last year.

The Madison Avenue shopping corridor on the Upper East Side—between 57th and 72nd streets— was hit hardest, with rents declining 25% year-over-year to $1,039 per square foot.

Rents are rapidly falling on Fifth Avenue as well, where retailers such as Tommy Hilfiger, Gap, Versace and Lululemon have closed up shop in the last year.

The Fifth Avenue shopping district between 49th and 59th streets still hosts the priciest retail space in the borough, with landlords asking $3,047 per square foot on average. But that number is down 22% from last spring, the second steepest decline in Manhattan.

Despite the decline, REBNY said Fifth Avenue landlords are still scaring off potential tenants with high asking rents, as “newer owners who purchased spaces at peak market rates are slow to adjust their prices and are struggling to fill vacant spaces.”

The fastest growing market is 125th Street in Harlem, according to REBNY.

Average asking rents climbed 10% there between this spring and last, to $137 per square foot. REBNY credited the rent growth to retailer interest in new space west of Fifth Avenue on the street.

Shake Shack, Whole Foods, Bath Body Works and Victoria Secret have all opened in the area.

REBNY put a positive spin on the falling rents, arguing that falling rents in the borough are attracting tenants.

Manhattan’s continued natural correction in retail rents is spurring deal-making across the borough’s top corridors as retailers reconsider new and existing ground floor spaces,” said REBNY President John Banks.

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