Overall, availability of retail space is shrinking and average asking rents are rising in New York City, a sign of recovery from the pandemic when availability soared and rents plummeted, according to a Q1 report from JLL.
However, some submarkets within the city are faring better than others.
Availabilities on Madison Avenue dropped to the lowest on record at 5.9%, per the report. Lower Fifth Avenue also had a significant decrease from 24% last year to 14.5% in Q1 this year, close to 2019’s record low of 12.9%.
In line with the previous quarter, availability in the Meatpacking district was 30.6%, up from 24.1% a year ago.
Similarly, while Upper Fifth Avenue and Times Square each saw year-over-year increases in average asking rents, most submarkets saw slight year-over-year decreases. Herald Square, anchored by Macy’s flagship, saw one of the more dramatic decreases, from $532 in Q1 2023 to $485 in Q1 this year.
In another good sign, upscale brands are investing in property, with Rolex, Gucci (owned by Kering), Louis Vuitton (owned by LVMH) and Akris spending millions on real estate on legacy luxury destinations Fifth Avenue and Madison Avenue; in the case of Rolex and Louis Vuitton, the companies plan new construction, JLL said.
Buzz around congestion pricing set to go into effect this year includes some concern that retail prices could rise, once trucks are charged $24 to $36 to enter the congestion zone in lower Manhattan. However, a similar regulation in London implemented a decade ago seems to have had little if any impact on retail sales in the city, while successfully cutting the number of vehicles in the zone by 18%, according to this report.
The new congestion rule is slated for June, but pending lawsuits could delay that, JLL noted.
