CBRE today released its Manhattan Retail MarketView for the fourth quarter of 2017.
Conditions in the Manhattan retail market wrapped up 2017 with both challenges and opportunities for landlords and tenants. Market fundamentals are solid, consumer confidence is high and most retailers posted strong year-over-year holiday sales.
“The retail market made big strides toward adjusting to new conditions, and while rents are down significantly, the rate of decline tapered off noticeably toward year end,” said Nicole LaRusso, Director, Research & Analysis, CBRE Tri-State. “While there may be more rent adjustment ahead, the biggest strides seem to be behind us. The strong demand drivers and great value opportunities should help bolster the market in 2018.”
Through the year, aggregate average asking rents across the 16 main retail corridors declined by 18.4% from those posted in 2016. Availabilities ticked up slightly in the past 12 months, but remained relatively flat quarter over quarter and even backed away from peak levels.
Leasing velocity was healthy through 2017, with 2.6 million sq. ft. of transactions closing, increasing year over year, though there was some pullback in Q4.
Total velocity, which includes new leases and renewal transactions, totaled 2.6 million sq. ft., an 8.2% increase from the 2.4 million sq. ft. recorded in 2016. SoHo was by far the most active neighborhood in 2017 by total square feet leased with 244,395 sq. ft., followed by Midtown West with 163,155 sq. ft., and Penn Plaza/Herald Square which saw 159,029 sq. ft. leased. SoHo also was the most active neighborhood in terms of total number of deals completed, logging 43 transactions in 2017.
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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.
