Rents continue to decline while available space stabilizes

Transcription

1 Manhattan Retail, Q Rents continue to decline while available space stabilizes *Arrows indicate change from previous quarter. 4.9% $34.5B 340.1K Sources: The Conference Board, September 2017; NYS Department of Labor, August 2017; U.S. Census Bureau, Moody s Analytics, June 2017; NYS Department of Labor, August MARKET NEWS National Geographic Encounter: Ocean Odyssey opened at 226 West 44th Street. The first-ever experiential retail concept from National Geographic is an adaptive reuse of the New York Times former press room. 3-D media gives an immersive underwater experience without the use of ocean wildlife or aquariums. Construction of Vessel the public art installation centerpiece of the Hudson Yards development is well underway, with six stories completed. Neiman Marcus, the anchor tenant of the million-square-foot-plus retail segment, plans to open its 190,000-sq.-ft. store in March Despite opening a 35,000-sq.-ft. temporary store at 1466 Broadway, as well as leasing space at the Manhattan Mall in Herald Square in Q3 2017, Toys R Us has filed for Chapter 11 bankruptcy protection. However, the retailer plans to continue operating its approximately 1,600 Toys R Us and Babies R Us locations globally as it undergoes restructuring. Continuing the off-price expansion trend seen in 2017 so far, T.J. Maxx plans to venture into the Broadway section of SoHo. This is following a Q lease for a Marshalls, one of T.J. Maxx s numerous store formats, near the World Trade Center. Quick-service restaurants are thriving. Chick-fil-A has announced that it will be opening its third store in Manhattan a 12,000-sq.-ft. restaurant that will be the largest in the country. MARKET OVERVIEW 1 Q CBRE Research 2017 CBRE, Inc. 1

2 All employees (thousands) MARKETVIEW ECONOMIC TRENDS LEASING ACTIVITY Figure 1: NYC Seasonally Adjusted Total Employment 4,600 4,400 4,200 4,000 3,800 3,600 3,400 3,200 3,000 3,730 3,825 4,429 Source: NYC Department of Labor, August Figure 2: Top Lease Transactions Tenant Size (Sq. Ft.) Address Neighborhood Industry Lions Gate Entertainment Corp. 47, Times Square Times Square Entertainment Toys R Us 36, Broadway Penn Plaza/Herald Square Toys T.J. Maxx 29, Broadway SoHo Consumer Products Sparks Steak House 22, East 46th Street Midtown East Restaurant/Hotel Gap, Inc. 15, Third Avenue Midtown East Clothing/Textiles Sephora USA 15, Broadway Times Square Cosmetics Multinational Technology Company 13, Fifth Avenue Flatiron/Union Square Computer Related Muji 12, East 59th Street Midtown East Clothing/Textiles Bluebird 10, Columbus Circle Columbus Circle Restaurant Tablecloth TsuruTonTan 9, West 48th Street Rockefeller Center Restaurant Tablecloth Totokaelo 8, Bowery NoLIta Clothing/Textiles Q CBRE Research 2017 CBRE, Inc. 2

3 Direct ground-floor availabilities MARKETVIEW AVAILABILITY Figure 3: Most Active Neighborhoods by SF Leased Q Neighborhood Leased (Sq. Ft.) Number of deals Times Square 63,592 2 Midtown East 55,099 5 SoHo 50,454 8 Penn Plaza/Herald Square 46,871 4 Midtown West 25,371 8 Flatiron/Union Square 23,702 3 Tribeca 20,816 7 Upper East Side 19,209 9 Columbus Circle 18,135 4 NoLIta 16,772 3 Figure 4: Most Active Tenant Type by Transaction Count Q Tenant type Number of deals Leased (Sq. Ft.) Restaurant Fast Food/ Quick-Service 20 42,985 Clothing/Textiles 13 55,958 Restaurant Tablecloth 11 45,123 Telecommunications 8 11,072 Retail Sales 6 22,598 Fine Arts 5 6,997 Apparel Women s 4 5,575 Pharmaceuticals 3 3,440 Health Care 3 10,150 Apparel Unisex 3 11,068 Figure 5: Count of Direct Ground-Floor Availabilities Q Q Q Q Q CBRE Research 2017 CBRE, Inc. 3

4 AVERAGE ASKING RENTS Figure 6: Average Asking Rents Q Corridor Parameters Q Q Quarter-overquarter change Q Year-over-year change Upper West Side Broadway 72nd to 86th Streets $287 $308 (6.7%) $325 (11.8%) Upper East Side Third Avenue 60th to 72nd Streets $295 $307 (3.8%) $333 (11.2%) Upper Madison Ave Madison Avenue 57th to 72nd Streets $1,289 $1,417 (9.1%) $1,340 (3.8%) Plaza District Fifth Avenue 49th to 59th Streets $3,412 $3, % $3, % Grand Central Fifth Avenue 42nd to 49th Streets $1,023 $1,042 (1.9%) $1,239 (17.4%) Times Square Broadway & Seventh Avenue 42nd to 47th Streets $2,086 $2,123 (1.8%) $2,225 (6.3%) Flatiron/Union Square Broadway 14th to 23rd Streets $393 $ % $408 (3.7%) Flatiron/Union Square Fifth Avenue 14th to 23rd Streets $406 $ % $ % Herald Square 34th Street Fifth to Seventh Avenues $575 $632 (9.1%) $647 (11.1%) SoHo Broadway Houston to Broome Streets $607 $667 (9.0%) $705 (13.9%) SoHo Prince Street Broadway to West Broadway $771 $774 (0.5%) $798 (3.4%) SoHo Spring Street Broadway to West Broadway $817 $828 (1.4%) $996 (18.0%) Meatpacking 14th Street Eighth to Tenth Avenues $351 $356 (1.5%) $ % Meatpacking Gansevoort Little West 12th Street 13th Street Ninth to Tenth Avenues $442 $481 (8.0%) $472 (6.3%) Meatpacking Washington Street 14th to Gansevoort Streets $550 $ % $ % Downtown Broadway Battery Park to Chambers Street $414 $421 (1.7%) $ % Aggregate All Corridors $711 $759 (6.4%) $820 (13.4%) Based on ground floor only, not inclusive of subleases. Q CBRE Research 2017 CBRE, Inc. 4

5 Figure 7: Aggregate Average Asking Rents Quarterly $1,200 $1,000 $800 $600 $400 $200 $0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q CBRE Research 2017 CBRE, Inc. 5

6 RETAIL CORRIDORS Q CBRE Research 2017 CBRE, Inc. 6

7 DEFINITIONS Availability Space that is actively marketed; includes spaces for immediate and future occupancy. Asking rent Average asking rent calculated using the straight line average for direct ground-floor spaces that have street frontage along one of the 16 corridors tracked by CBRE. Total available spaces Based on available ground-floor space with street frontage that faces one of the 16 corridors tracked by CBRE. SOURCES CONTACTS Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.