Average asking rent for the Fifth Avenue retail corridor has crossed over $3,000 per square foot, the highest in New York City, according to CBRE’s second quarter Manhattan retail report. The increase represents the first time a Manhattan retail corridor has registered average asking rent north of $3,000.
“There was a time when $600 per square foot was considered outrageous on Fifth Avenue,” Richard Hodos, executive vice president of the CBRE Retail Group, told The Commercial Observer. “Putting inflation aside, it speaks to the fact that New York is a world class city.”
Asking rent numbers are specific to ground floor space and represent a significant premium to lower and second floor space. “If you are trading out of the basement, you might be paying $150 per square foot,” Mr. Hodos noted. “The blended rent is much, much lower and from a business perspective, that’s how tenants can make it work.”
Major retail leases in the market during the second quarter included Ralph Lauren’s 38,000-square-foot commitment at 711 Fifth Avenue and Valentino’s 20,000-square-foot deal at 693 Fifth Avenue. In a smaller scale transaction, Cartier secured 5,600 square feet at 767 Fifth Avenue while its 653 Fifth Avenue flagship is renovated.
Though availability on Fifth Avenue is relatively scarce, there are a handful of larger blocks hitting the market. At Saks Fifth Avenue, the Faconnable space is on the market, while the H&M location at 640 Fifth Avenue is seeing interest from major tenants, including Nike and others, according to Mr. Hodos.
Eight of Manhattan’s 11 major retail corridors experienced quarter-over-quarter increases in asking rents, with Broadway on the Upper West Side setting the pace with a 15.58 percent jump. On the East Side, upper Madison Avenue experienced an 8.68 percent increase in asking rents during the quarter.
Further downtown, Fifth Avenue Flatiron saw a 10.15 percent increase to $358 per square foot from $325, attributable to the addition of new, higher-priced space.