NYC’s Retail Availability Nosedives in First Quarter of 2024: Report
By Nick Trombola April 5, 2024 5:42 pm
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The retail market continues to be a saving grace for commercial real estate in New York City these days, and a new report finds a lot fewer empty storefronts.
The average availability rate for NYC retail space in particular has reached a new low in the post-pandemic world, dipping below even the rates seen in the years before the pandemic began, according to a new retail market report from JLL (JLL). The report covered Manhattan and parts of Brooklyn.
Just 15.4 percent of prime retail space was available on average during the first quarter of this year. That figure is nearly half of the 2021 average rate of 28 percent, and well below the average rate of 21 percent recorded during the pre-pandemic year of 2019, according to JLL.
Luxury brands, such as Kering, Louis Vuitton and Rolex, are driving much of the retail activity in the city, particularly along upper Fifth Avenue, where Kering made a mammoth $963 million purchase of a retail condo at 715-717 Fifth Avenue in January. The Fifth Avenue corridor has the highest average asking rent in the city by far at $2,163 per square foot for ground-floor space.
Yet, nowhere is the retail market tighter than it is on Madison Avenue between East 57th and East 72nd streets. Availability rates there dropped to just 5.9 percent this past quarter, a record low for the luxury stretch, according to JLL.
Still, some areas of the city saw rising availability rates despite the trends elsewhere. Availability rates at Herald Square in Midtown were the highest in JLL’s report, at 35.2 percent, while those in the Meatpacking District remained at 30.6 percent — the same as the previous quarter, though still up about 6 percent year-over-year.
In terms of average asking rent, the Flatiron District is on the opposite end of the stick from upper Fifth Avenue, at $248 per square foot, the lowest recorded by JLL in the city this quarter. SoHo — which has been a strong market post-COVID — also had relatively low average asking rents for Manhattan, at $281 per square foot.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
