Manhattan Landlords Scramble To Uphold Record High Retail Rents While Keeping Tenants
Manhattan retail landlords are struggling to maintain occupancy after having boosted rents to record highs, and the floundering state of the retail sector is not helping matters.
Owners are doing everything from paying for moving expenses to redesigning interiors to avoid dropping rents or having an excess of vacant stores, Bloomberg reports. Experts said these sorts of concessions are not typically a part of the Manhattan retail landscape, but they are morphing into a key component for new leases — and especially so for large stores in prominent areas like Madison Avenue and Fifth Avenue.
Just as mass retail bankruptcies could provide investment opportunities for industry players, experts said rising vacancies give retailers more power in their relationships with landlords. And many retailers are breathing a sigh of relief as prime Fifth Avenue rents start to decline after growing 50% during the past five years, peaking at an unheard of $3,213/SF in Q3 2016.