$3,350 per sq. ft., according to Cushman & Wakefield.
“Despite being such a big city, New York has relatively few
places for shoppers to shop national and international brands,”
says Strauss. Those prime markets—Soho, Times Square, and
the Plaza among others—have seen rents jump the most, from
25% to upwards of 200%, he says. In these areas, it is getting
frothy and it is at a point where most retailers have a hard time
making sense of them, he adds.
The price escalations have slowed deals as retailers move
cautiously. “While retailers want to come in and make a big
splash with a branding play or flagship store, they don’t want
to come in and lose a lot of money,” says Gibson. In addition,
mature retailers with many stores in the city are taking a closer
look at how they stay in Manhattan and still make money.
A number of new lease deals reflect retailer repositioning
within the market due to rising rents. In some cases, it is more
expensive to remain in place than it is to move a few blocks.
Retailers also are looking to “rightsize” their stores or reduce
their square footage to cut costs.