Real estate brokers and analysts like to put the best possible face on Manhattan’s troubled retail sector, where for every thriving and fully-leased block, there’s one that’s near-vacant.
There’s some genuine good news in CBRE’s fourth-quarter retail data. A decline in availability nudged asking rents up 1.2% over the prior quarter’s $615 per square foot.
Direct ground-floor availabilities fell to 222 from 229, the sixth consecutive quarterly improvement.
Apparel stores led leasing volume with over 546,000 square feet — a good omen given that online shopping emptied many clothing stores.
Some downtown deals were huge, such as Cotton On’s 20,000 square feet for its first city location at 512 Broadway. Other biggies included Chanel and Dolce Vita in Soho, Armani Exchange in Nolita and Daniel Boulud’s huge French cafe and market at One Madison Square.
On another up-note, CBRE analyst Hironori Imaizumi told us that strong markets such as Soho and Nolita have begun to “bleed over to the edges.” For example, “Lafayette and Mott Streets are becoming much more active.”
But CBRE tracks only 16 “prime” retail corridors. It doesn’t include much of the vacancy-blotted Union Square area or the near-wasteland of Broadway between Canal and Houston streets.
Imaizumi explained that the choice of “prime” corridors was based partly on broker feedback regarding “hot” areas.
He characterized the fourth quarter as “great” and said, “Demand is still very strong.” But he cautioned that the outlook for 2023 is tempered by recession fears which he termed “appropriate reluctances.”