CBRE Group, Inc. today released a New York City Retail Viewpoint which explores how the nation’s premier retail market is positioned to handle the challenges of the current retail environment. Although New York City is not immune to the challenges being witnessed across the country, the city’s unique dynamics point to long-term strength.
“New York’s tremendous density, restrained retail development and strong demand from its enormous residential, worker and tourist populations put it in a far better position than smaller retail markets to adapt to the structural changes and cyclical hardships impacting the country,” commented Nicole LaRusso, director, research and analysis, CBRE Tri-State. “While local demand fundamentals remain on solid footing, getting back to market stability will require downward rent adjustments along some retail corridors.”
Among the findings in the report:
The city’s retail sales have grown for seven straight years, with robust demand supporting a large, diverse landscape of retailers
Retail asking rents surged during the economic recovery post-Great Recession, a trend that far outpaced growth in retail sales activity. Many retailers now find it unaffordable to continue in the market, resulting in a rise in available storefronts along Manhattan’s main retail corridors.
Growth from food and beverage operators, discount retailers and international brands in the city continues. And while increasing pressure on department stores has led to closures across the country, the city’s shopping environment is far less dependent on department stores to drive foot traffic—and thus less vulnerable.
Retail corridors best positioned in the current market include SoHo, the Meatpacking District, Times Square, Flatiron and Downtown, while those facing the biggest challenges include Upper Madison Avenue, Fifth Avenue between 42nd and 49th streets and 49th and 59th streets, and Herald Square.
The power of a trend known as omnichannel retailing, a strategy that seeks to combine online and in-store shopping into a seamless, integrated experience for customers, is growing.
You can find the full New York City Retail Viewpoint here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
