Retail Rents Have Dropped More Than 20% In Parts Of Manhattan As Landlords Get Desperate

Direct ground-floor retail availability hit a new high of 254 spaces across the 16 prime retail corridors in Manhattan, according to a CBRE retail report released Wednesday. Leasing velocity slowed again and rents tumbled, as the average asking rent hit dropped 13% year-over-year to $659 per SF in Q3, a 4% drop from Q2.

Some parts of the city, particularly those where rents have soared in previous years, experienced particularly severe rental declines. On Prince Street in SoHo, average asking rents are now down 42%, going from an average of $705 per SF this time last year down to $405. SoHo's Broadway and Spring Street corridors' asking rents dropped 20.1% and 16.8% year-over-year, respectively.

The Meatpacking District has also taken a hit -- rents there are on average $448 per SF, a 22% decrease from last year. Stretches like Times Square and Fifth Avenue in the lower 40s also saw sizable decreases.

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Just this week, the market got a glimpse into where values on retail properties may be landing. Akris, a Swiss clothing retailer, paid $45M for three retail properties on Madison Avenue, The Wall Street Journal reported, marking an 80% drop from the peak of the market in 2014.