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The city’s retail sector has started off 2024 in better shape than it was in before the pandemic.
The average availability rate was 15.4% for the first quarter of the year, far below not just the peak of 28% in 2021 but the average rate of 21% in 2019, according to data from JLL. There were 212 total available spots for the quarter, down slightly from 219 in the fourth quarter of last year.
Demand for retail space has been particularly strong on Madison Avenue between East 57th Street and East 72nd Street, where availability fell to a record low 5.9% last quarter. Patrick Smith, vice chairman of JLL’s New York retail brokerage, described the Madison Avenue comeback as “amazing” and driven largely by “the strength of luxury and luxury brands, along with a market perception of rents being discounted.”
Available spots on Fifth Avenue from 42nd Street to 49th Street also saw a sharp drop to 14.5%, close to its record low of 12.9% during the second half of 2019, while availabilities in the Union Square/Flatiron area returned to 2019 levels as well.
But this trend did not hold across every corridor JLL studied. In the Meatpacking District between Ninth and 10th avenues and 14th and Gansevoort streets, for instance, the availability rate rose to 30.6%, up about 6% year over year.
The Meatpacking District’s overall availability rate rose to 30.6%, up 6.5% year over year. This was the second-highest rate in Manhattan for the first quarter, behind only 34th Street/Herald Square, at 35.2%, according to the report.
And the average asking rent dropped slightly as well, falling year over year and quarter over quarter to $537 per square foot. Upper Fifth Avenue and Times Square were the only submarkets to see average asking rents increase year over year.
Upper Fifth Avenue, running from 49th Street to 60th Street, and Times Square also had the two most expensive asking rents in the borough, at $2,163 and $1,267 per square foot, respectively. SoHo’s was the cheapest, at $281 per square foot, the report says.
Williamsburg, the only Brooklyn neighborhood included in the report, had an average asking rent of $303 per square foot and a 9.6% availability rate last quarter, the report says.
Major retail leases for the quarter included Wegmans taking 58,874 square feet at 1932 Broadway on the Upper West Side and Bedford Stuyvesant New Beginnings Charter School taking 51,498 square feet at 217 N. 10th St. in Williamsburg.
Retail has enjoyed a smoother recovery from the pandemic than many expected, even as issues like theft and unlicensed marijuana stores continue to plague the sector. Its recovery lies in stark contrast to Manhattan’s still-struggling office market, which had a record-high availability rate of 18.1% during the first quarter, according to Colliers.
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Eddie Small , 2024-04-04 18:48:58
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