Asking rents in the Manhattan retail leasing market continue to adjust after reaching unsustainable levels three years ago. Declines have been widespread across Manhattan’s top retail corridors since spring 2015 and our Manhattan Retail Report Advisory Group stated that the market still faces many challenges. However, owners and retailers have been increasingly responsive to the new retail environment.
As discussed in previous reports, the existing hurdles in the Manhattan retail leasing market have been a by-product of a natural fluctuation in the market as well as a changing retail industry. These issues will be resolved with shifting rents and lease structures, but time is required for this process to develop. Changes in retail markets take more time to manifest due to the impact of longer-term factors. Examples include a retailer’s timeline for strategizing a business plan, securing financing, and planning improvements to a retail space to fit their business needs.