The Manhattan retail market continues to experience a decrease in asking rents, according to CBRE’s Q3 retail MarketView. Leasing velocity also looks to have slowed somewhat in 2019 but is still pacing ahead of the levels seen in recent years. Additionally, the city’s economic fundamentals remain quite strong, with quarterly retail sales, gross city product and tourism numbers all continuing to increase.
In the third quarter report, CBRE noted that total leasing velocity over the previous four quarters was just under 3.72 million sq. ft., down 5.8% from the 3.95 million sq. ft. reported in Q2 2019, but well ahead of the totals seen in either Q3 2018 or Q3 2017. In addition, the number of direct, ground-floor availabilities in Q3 2019 slightly decreased, both quarter-over-quarter and year-over-year, with 214 available spaces in the 16 main retail corridors in Manhattan.
The average asking rent continued to decline in Q3 2019, with the average of the 16 key corridors falling by 5.7% year-over-year to $756 per sq. ft., marking the eighth consecutive quarter of rental rate decline in the city. Rent decreases in the high-priced luxury corridors such as Upper Madison Avenue and Broadway in SoHo were the main drivers of this overall decline. The continuing struggle with an elevated number of vacancies and sublease availabilities, along with the introduction of new spaces with competitive pricing, continued to put downward pressure on asking rents in these corridors.
“While the Manhattan market continues to see downward price adjustments, tenants across an array of categories, including entertainment, food and beverage, apparel, health and beauty, and service-oriented businesses remain active, drawn to expansion or renewal opportunities afforded by the favorable leasing terms and the strong underlying local economy,” said Nicole LaRusso, Director of Research & Analysis, Tri-State.
Midtown West recorded the highest leasing volume in Q3 2019, with over 121,000 sq. ft. leased across seven transactions. Much of this was attributed to the 95,000-sq.-ft. multi-level renewal of the American Multi-Cinema Theatre at 304 West 34th Street as well as the 11,000-sq.-ft. lease signed by Lightbridge Academy, an early childhood education center, at 827 Eleventh Avenue.
The full Q3 Manhattan Retail MarketView can be viewed here.
In the third quarter report, CBRE noted that total leasing velocity over the previous four quarters was just under 3.72 million sq. ft., down 5.8% from the 3.95 million sq. ft. reported in Q2 2019, but well ahead of the totals seen in either Q3 2018 or Q3 2017. In addition, the number of direct, ground-floor availabilities in Q3 2019 slightly decreased, both quarter-over-quarter and year-over-year, with 214 available spaces in the 16 main retail corridors in Manhattan.
The average asking rent continued to decline in Q3 2019, with the average of the 16 key corridors falling by 5.7% year-over-year to $756 per sq. ft., marking the eighth consecutive quarter of rental rate decline in the city. Rent decreases in the high-priced luxury corridors such as Upper Madison Avenue and Broadway in SoHo were the main drivers of this overall decline. The continuing struggle with an elevated number of vacancies and sublease availabilities, along with the introduction of new spaces with competitive pricing, continued to put downward pressure on asking rents in these corridors.
“While the Manhattan market continues to see downward price adjustments, tenants across an array of categories, including entertainment, food and beverage, apparel, health and beauty, and service-oriented businesses remain active, drawn to expansion or renewal opportunities afforded by the favorable leasing terms and the strong underlying local economy,” said Nicole LaRusso, Director of Research & Analysis, Tri-State.
Midtown West recorded the highest leasing volume in Q3 2019, with over 121,000 sq. ft. leased across seven transactions. Much of this was attributed to the 95,000-sq.-ft. multi-level renewal of the American Multi-Cinema Theatre at 304 West 34th Street as well as the 11,000-sq.-ft. lease signed by Lightbridge Academy, an early childhood education center, at 827 Eleventh Avenue.
The full Q3 Manhattan Retail MarketView can be viewed here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
