The New York retail real estate market could be ready for a comeback.
At a breakfast presentation on Tuesday, executives from the brokerage firm Cushman & Wakefield reported that the market in Manhattan started showing signs of stability at the end of 2009 and could rebound in 2010.
“We believe the Manhattan retail market has bottomed,” said Joseph Harbert, COO of the New York metro region for Cushman & Wakefield. “We expect most of the submarkets will remain at the level they are now for the first few months of the year, and that absorption will return in the second quarter of 2010.”
Leading the recovery is the Times Square area, where average asking rents rose 12 percent between the third and fourth quarters to $658 per square foot.
Brad Mendelson, EVP of retail services at Cushman & Wakefield, attributed that change to the city’s healthy tourism industry. “New York had the largest amount of tourists of any city in the world last year,” he said. “Forty-five million people came here. That’s a decline of 4 percent, but it was still substantial.”
And while availability rates declined on Madison Avenue in the fourth quarter, Mendelson said there is still opportunity for retailers in that area, where rents dropped by $10 per square foot.
Meanwhile, in Soho, average asking rents for ground-floor space jumped 8 percent in the quarter to end the year at $258 per square foot, while availability increased 12.6 percent.
And on Fifth Avenue, between 49th Street and 60th Street, availability remained stable at 3.3 percent, while asking rents dropped 11 percent to $2,000 per square foot.