(Stock)
The Manhattan retail market is slowly making a comeback.
Retail rental velocity increased in the fourth quarter of 2021, according to a CBRE reportwhile the overall rolling four-quarter rental velocity – which measures renewals and new leases for the previous four quarters – reached approximately 1.86 million square feet.
The figure is up 17% from the previous quarter, but still 14% lower than the previous year.
The number of direct ground floor vacancies in the fourth quarter decreased to 266 spaces from the 282 recorded in the third quarter in the 16 retail corridors tracked by CBRE. On Broadway in SoHo, for example, availability dropped 24%, from 25 to 19 seats.
Additionally, the average retail asking rent in these 16 retail corridors fell about 1% to $597 per square foot, 8% lower than a year earlier. This is the 17th consecutive quarterly decline, with prices remaining at levels not seen since 2011.
Areas that tend to be heavily frequented by tourists have seen a larger decline in rents. Average asking rents in Times Square fell to $1,189 per square foot, a quarterly decline of 1% and a yearly decline of 17%. The fourth quarter asking rent marked the first time the average price in the corridor fell below $1,200 per square foot since 2011.
At $641 per square foot, Fifth Avenue in Grand Central also saw a significant decline in average asking rents, down 2% quarter-over-quarter and 16% year-over-year. Retailers COS and & Other Stories’ renewed their shared 24,000 square foot flagship store at 505 Fifth Avenue, but it was the only corridor deal completed in 2021.
Still, there were some bright spots across the borough.
SoHo recorded the highest rental velocity in 2021 with more than 202,000 square feet leased in 42 transactions. Among the most significant deals was the 15-year lease signed by British high-jewelry brand Vashi, which took 11,000 square feet at 110 Greene Street from SL Green, the French luxury goods conglomerate Cartier, obtaining a new lease of 9,300 square feet at 102 Greene Street, and high-end luggage brand Tumi signing over 9,100 square feet for a new outpost at 513 Broadway.
Madison Square recorded the fastest rental velocity in the fourth quarter, thanks to the 55,000 square foot lease from fitness and entertainment brand Chelsea Piers Management, which signed a 20-year contract as the first tenant of the 1 Madison Avenue recently developed by SL Green.
