Stat of the Week: 10.1 Percent
It’s the most wonderful time of the year…for retail. With holiday shopping in full swing and this year’s holiday sales expected to increase 4.2 percent compared with 2016, there is a lot to be positive about at New York City’s annual International Council of Shopping (ICSC) event. Although availability rates are up year-over-year in nine of 11 retail statistical submarkets tracked by Cushman & Wakefield, asking rent depreciation slowed. Average ground-floor asking rents dipped just 3.3 percent to $1,115 per square foot based on the 11 submarkets, which suggests asking rents are beginning to stabilize after posting an 8.5 percent decrease one year prior. Of the 11 submarkets, five recorded an increase in asking rents compared to one year ago.
So let’s unwrap some early holiday gifts and examine the five submarkets where asking rents reversed the trend this year.
Upper West Side – Ground-floor average asking rents in this submarket stabilized over the past six quarters, averaging within a $7 per square foot bandwidth, and are up 0.3 percent year-over-year in the third quarter of 2017 at $365 per square foot.
Madison Avenue – Despite ground-floor average asking rents being down from a historical high of $1,607 per square foot in the third quarter of 2015, at $1,441 per square foot, rents are up 1.3 percent year-over-year.
Lower Manhattan – At $427 per square foot, asking rents reached a historical high in this submarket. It is the only submarket to avoid the retail slowdown, as rents increased 2.2 percent compared with one year ago.
Meatpacking – Although the availability rate remains high in this submarket at 25.3 percent, asking rents increased during the past two quarters—up 7.3 percent year-over-year after reaching $382 per square foot in the third quarter of 2017.
Flatiron – Despite asking rents dropping during the last two quarters to $415 per square foot in the third quarter, this submarket still maintains the highest year-over-year retail rent increase of 10.1 percent.
So as we run around for the best deals this holiday season, remember we all contribute to the sustainability of the shopping experience!