The retail real estate market in New York saw some heat in the second quarter, according to a recent report from real estate brokerage and consultancy Cushman & Wakefield.
Some high-profile signings in prime shopping areas led to a city-wide decline in availability, including in the Madison Avenue submarket, where availability fell to 10 percent from 12.8 percent in the first quarter.
“Retailers are in a managed expansion mode, and with many owners offering attractive pricing, many retailers have found this to be the right time to make commitments,” said Joseph Harbert, COO of the New York metro region for Cushman & Wakefield. “With numerous deals in the pipeline, we expect to see activity continue into the second half of this year, leading to additional declines in availability.”
Through availability in Manhattan’s upper Fifth Avenue submarket remained unchanged in the most recent quarter, it was the recipient of the largest retail lease in the city’s history. Japanese fast-fashion retailer Uniqlo inked a 90,000-sq.-ft. lease at 666 Fifth Avenue.
According to Harbert, asking rental rates around the city remain favorable for retailers. In fact, he estimated, they are off by about 30 percent from their peak, even though they increased slightly in the second quarter.
On Madison Avenue, average rents for ground floor space were $831 per square foot at mid-year 2010, up 0.4 percent from the first quarter. Along upper Fifth Avenue, from 49th Street to 60th Street, rents rose 3.2 percent to $2,100 per square foot.