Manhattan Retail Market Is Turning Into A Ghost Town
Now might be the time to search for deals in outer boroughs.
Halloween seasonal madness is gone, but several Manhattan districts still look kind of spooky.
These days, NYC’s most iconic stretches, like Fifth Avenue, as the Real Deal put it, resemble ghost towns.
No, it’s got nothing to do with the election results (we at Agorafy are still processing what just happened). It’s just that the retail spaces in Manhattan have finally become so expensive that nobody can ever afford to operate a business there. We mean, New York City has only 79 billionaire residents—the only clientele that can keep all those Fifth Avenue stores afloat with their average asking rents hitting $3,213 a square foot. For those of you who are timidly mentioning “sales volume”—ever heard of e-commerce? Fifth Avenue, by the way, isn’t the only retail “ghost town” in Manhattan: Other neighborhoods, Tribeca and Soho among them, are also plagued by the glut of open space.
Richard Hodos of CBRE claims that, in some cases, retail rents in Manhattan need to come down 30 percent to even “start make sense again.” Sounds like a reasonable idea, except “sense,” as it appears, is in short supply these days. So, instead of drastically lowering retail space prices, landlords clearly prefer to sit on a record amount of open space. If you think that now would be the good time to take advantage of the retail space oversupply and snatch yourself a deal, here is some news—not gonna happen.
So, unless your company is ready to shell out $3,213 a square foot, you might want to search for deals elsewhere—and those, just like decent ethnic eateries and reasonably priced apartments, are to be found in outer boroughs.
These days, certain retail stretches in Brooklyn, Queens and even Bronx might be just as busy as Fifth Avenue—and definitely have more potential to generate income. Here is Agorafy’s list of the hottest retail strips in outer boroughs.
- Queens—Junction Boulevard between Northern Boulevard and Roosevelt Avenue
The asking rents for retail spaces in this area range between $53 and $90 a square foot—good to see you again, double digits. But don’t be fooled by the cheap pricing. Residential development here is on the rampage, and then, according to the bitter-sweet science of gentrification, follows hectic activity in commercial leasing.
- Brooklyn—Third Avenue between 15th Street and St. Mark’s Place
This area has been recently featured in AM New York’s list of up-and-coming retail strips, and we at Agorafy wholeheartedly agree. While commercial rents there are rising (and where aren’t they?), fueled by industrial and commercial development frenzy, you can still snatch a retail space there in between $65 and $100 a square foot.
- Bronx—Third Avenue between East 149th Street and East 156th Street
If we entertain such statements as “Bushwick is the new Williamsburg”, profoundly deep in its meaninglessness, then Bronx is definitely the new Brooklyn. Meaning—this borough is hot as balls.
The retail space asking rents on Third Avenue might go well above $100 a square foot—but the cheaper deals are still to be found.
If you need any further proof, there goes—according to the survey conducted by real estate search engine Homes.com, this borough is the unfriendliest in NYC. Soaring prices and the ‘tude—a little more effort, Bronx, and you will rightfully deserve “New Fifth Avenue” title.