At the start of the year, my firm announced the launch of our new retail leasing division. Executive Vice President of Retail Leasing, Ben Fox led the charge. It has since grown to include nine agents and continues to grow. Currently, the division has about 50 active exclusive listings.
We are pleased that the NYC retail leasing activity continues to improve along with consumer confidence. Partially driving this increase is the record 50 million tourists, who will come to NYC this year. According to REBNY, Fifth Avenue and Times Square have seen the greatest increase in asking rents. Fifth Avenuebetween 49 th and 59 th Streets (which include Louis Vuitton, Tiffany & Co., Prada, Uniqlo, Gucci, etc.) saw a 17% increase in the asking rents to $2,633/SF since Spring 2011 and 11% since Fall 2010.
While world famous streets likeFifth Avenue,MadisonAvenue,Bleecker Streetand Broadway have tenants at their beck and call, the lesser famed streets ofManhattanrequire more effort to lure new tenants.
Massey Knakal Director of Retail Leasing, Jill Lovatt, who focuses on the Upper East Sidecan attest. “No space leases itself,” Jill said “You have to search tenants out,” she added. During the 100 degree summer heat, Jill walked door-to-door in a 10 block radius to find a tenant for 1386 2 nd Avenue.
This 600SF, space located in the middle of the 2 nd Avenue subway line construction, ultimately rented to a tenant just two doors down. Discussions started in May; Jill successfully closed on the lease in October.
The tenant, a custom tailoring business, signed a 10 year lease for approximately $100/SF. While this may be a far cry fromFifth Avenue, this is a strong rent for the neighborhood.
As NYC retail rents vary dramatically from one block to another, it is important to consult a retail leasing broker who is familiar with the area. For example, Madison Avenue rents on theUpper East Sideaverage $500/SF, but Lexington Avenuedrops by 50% two Avenues away. Second Avenue then drops off by another half in some cases.
In today's real estate industry, the modern techniques of email and the internet have become the number one source for marketing; however “old fashioned” door-to-door marketing is often times what it takes to get the job done.