Declining Rents Could Help Spur A Retail Comeback

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Retail Shops On New York's Fifth Avenue

Though retail has been in a near-constant state of peril for years now, landlord adjustments may finally be beginning to turn the story around.

Manhattan's asking rents for ground-floor retail declined between spring of 2016 and the same time this year in 14 of the 17 major corridors, according to a new study by the Real Estate Board of New York. While that may not sound like good news, it has enticed retail tenants at better rates than other cities.

The Flatiron corridor of Fifth Avenue (between 14th and 23rd streets) actually increased rents by 18% over the period in question, making it the best-performing area in the borough. In second place, with an 11% increase, was the Lower Manhattan corridor on Broadway.

REBNY president John Banks said the declining rents were a natural correction from their all-time highs in 2014 and 2015, and claimed the increased activity as a result was "countering the effect of difficult national retail conditions."

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