Big-Box Retailer Commitments Offer Bright Spot in Weak Market
Retail leasing velocity in Manhattan decelerated in the fourth quarter of 2020, marking the sixth consecutive quarterly decline, according to CBRE’s Manhattan Retail MarketView, released today.
The Q4 rolling four-quarter aggregate leasing velocity, which measures total leasing (renewals and new leases) for the four prior quarters, dropped below 2.1 million sq. ft. for the first time since Q1 2016. While a recent spate of long-term deals signed by big-box retailers brought some positive news in Q4, leasing velocity is likely to remain depressed until the pandemic is brought under control and there is clarity around when the economy can fully reopen.
Flatiron/Union Square recorded the highest leasing velocity in Q4 2020 with over 86,000 sq. ft. leased in three transactions. The most notable transaction was Home Depot, which exercised its15-year renewal option for its 79,000 sq. ft. outpost at 28 West 23rd Street. Arc’teryx, a Canadian outdoor clothing and climbing gear retailer, signed a new two-year, 6,700 sq. ft. lease for the space formerly occupied by Mirror at Thor Equities’ 139 Fifth Avenue.
With over 225,000 sq. ft. leased in 61 transactions for the year, and with more than 20,000 sq. ft. closed in the fourth quarter alone, the food & beverage (F&B) category led the number of deals among Manhattan’s retail sectors in 2020. ChefScape, a food and beverage business incubator specializing in developing food halls for culinary entrepreneurs, signed the largest F&B transaction of Q4 2020 with a 15-year lease to take over the 7,000 sq. ft. ghost kitchen at 116 West Houston Street in Greenwich Village.
The average retail asking rent in Manhattan’s prime 16 retail corridors dropped 9.9% year-over-year and 1.1% quarter-over-quarter to $652.00 per sq. ft., the 13th consecutive quarterly decrease.
The count of direct ground-floor availabilities tracked across Manhattan’s 16 premier shopping corridors increased from 254 to 264 quarter-over-quarter. Mounting space additions will keep downward pressure on rents in the near-term.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 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.
