In the second quarter of 2021, Manhattan’s retail market experienced a significant increase in average asking rents, reaching $716 per square foot. This marks the eighth consecutive quarterly rise and reflects a 4% increase from the previous quarter. According to CBRE’s Q2 Manhattan Retail Figures report, prime retail corridors also saw improvement with a taking rent index of 79.6%, up from 78.3% in the prior quarter and 78.8% compared to last year.
Furthermore, there was a decrease in available ground floor spaces within the top shopping corridors by approximately 2%. This totals to only181 spaces remaining for lease which is significantly lower than previous years with an overall drop of about10%.
Despite sustained demand driven by tourism and a robust labor market, leasing activity has slowed due to high costs and limited supply. In fact,the rolling four-quarter aggregate leasing velocity reached only2 .5 million square feet- down9 %fromthe lastquarterand21 %year-over-year.
However,given recent developments,Gov.Hochulhas indefinitely suspended congestion pricing program thatwas initially set for June30th.This decision was made due affordability concerns as well as sustainability issues.New retailers continue driveManhattanleasingamidrentincreaseswhichis expectedtocontinueinthe upcomingquartersaswell.
