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Spring 2003 Retail Report
May 22, 2003
The average asking rent for all space increased 3.5% in Manhattan. Increases in the average asking rent were reported on the East Side 15.3%; Upper Manhattan 6%; the West Side 4% and Midtown 2%.
On Manhattan’s premier corridors average asking rent increases for ground floor space were more dramatic. Madison Avenue between 57th and 67th Streets saw the average increase 38%; Fifth Avenue between 48th and 59th Streets saw a 22% increase. Overall, the average asking rent for ground floor space along the primary retail streets increased 4.9%.
However, Midtown South and Downtown saw their average asking rents for all space decline 1.5%. Major retail corridors Downtown also saw a decline.
Hudson Street in Tribeca had a 1.6% decline and Broadway in Lower Manhattan had a 7.4% decline in average asking rent for ground floor space.
These declines suggest the continuing struggle in these areas to recover from September 11.
Tenant activity is vibrant. However, the uncertain economic climate—military activity in Iraq and tax increases in New York—has made retailers tentative in making new commitments.
Landlord flexibility in negotiating standard lease terms is increasing. More generous tenant work packages and less frequent base year rent increases are available for creditworthy tenants who are prepared to sign a lease.