Fifth Avenue gets pricier for retailers
Retail rents along Manhattan’s ritzy Fifth Avenue shopping strip have gone up 22% this year, putting the famed retail corridor second to Hong Kong, according to a real estate report.
During the quarter that ended in June, Fifth Avenue between 49th and 59th streets saw average retail rents reach $3,050 per square foot annually, according to CBRE, a real estate services firm.
Hong Kong is the global luxury retail leader with an average rent of $4,328 per square foot a year.
“Global retailers continue to desire premier retail locations in gateway cities because of the global shoppers those corridors attract and the value delivered for brand visibility,” said Anthony Buono, executive managing director of CBRE’s Americas retail services, in a statement.
Regardless of the pricey Manhattan rents, there is hot demand from retailers to get into the Fifth Avenue shopping scene next to Saks, Prada and Louis Vuitton.
“That Fifth Avenue corridor is the crème de la crème of anyone in fashion,” said James Famularo, vice president of New York Commercial Retail Service.
“If you’re a big name and you want to be a big name, and you don’t have a presence on that strip, you’re not going to be in the business for very long.”
For instance, this year on Fifth Avenue, Ralph Lauren got a 38,000-square-foot spot, Valentino leased a 20,000-square-foot space and Cartier temporarily expanded to a 5,600-square-foot place.
International mid-priced brands like Spain’s Zara, Sweden’s H&M and Japan’s Uniqlo were recently attracted to Fifth Avenue’s glitz amid the city’s tourism boom.
“You’re all over the map here,” said Faith Hope Consolo of Douglas Elliman real estate. “Denim to diamonds.”
The retail rent bump is a trend elsewhere in Manhattan. Major shopping corridors such as SoHo and Herald Square saw increases in average asking rents since the first quarter of 2013.
Upper West Side saw a 15.5% increase to $408 from $353 and the Flatiron area increased nearly 10.1% to $358. Times Square held steady and downtown rents dropped 8.8%.
Consolo said that the prices show a healthy real estate market that is attracting more than luxury retailers.
“It is creating new retail corridors and making the scene even more exciting,” she said.