New York's Fifth Ave. Retail Space World's Most Expensive

[Jularc]

New York's Fifth Ave. Retail Space Most Expensive


http://www.bloomberg.com/apps/data?pid=avimage&iid=iRid7F9CpVi0
People walk past the Prada store on Manhattan's Fifth Avenue in New York.


By David M. Levitt

Nov. 15 (Bloomberg) -- Manhattan's Fifth Avenue is the world's most expensive retail location, with rents rising above $1,500 a square foot annually for the first time, broker Cushman & Wakefield reported.

An average 1,000 square-foot retail storefront along Fifth Avenue's ``golden corridor'' between 49th and 59th streets now costs about $1.5 million a year, the New York-based commercial property broker reported in its annual ``Main Streets Across the World'' survey. That's up 11 percent from last year, according to the survey.

Rents are rising in New York even as consumer spending in the U.S. is beginning to slow. Non-U.S. shoppers are being lured to New York because of the weak U.S. dollar. Fifth Avenue, like Paris's Champs-Elysees and Hong Kong's Causeway Bay, is also benefiting from the globe-hopping shopping habits of the rich, John Strachan, the company's global head of retail, said in a statement.

``We are seeing the emergence of a lineup of global shopping destinations,'' Strachan said. These locations attract ``shoppers from around the world whose very reason to travel is quite often to shop.''

Causeway Bay ranked second in the Cushman survey, at $1,213 a square foot, while the Champs-Elysees was third at $922 a square foot, and London's New Bond Street came in fourth at $814 a square foot. That's the same order in which those cities finished last year.

Retail rents for ground floor space on Fifth Avenue have doubled in the past five years, from $750 to $1,500 per square foot, Gene Spiegelman, executive director of Cushman, said in the statement. Gucci, the luxury retailer and leather goods company, leased more than 40,000 square feet in the Trump tower at 56th Street and Fifth Avenue last year.

New Delhi's Khan Market, India's costliest shopping district, rose the most in this year's ranking, to 16th from 24th at $280 a square foot. It was 41st in 2005. This is due in part to India's ``lack of high-quality space in the right location,'' said Rajneesh Mahajan, head of retail for Cushman's Indian office.

``This is in strong contrast to other emerging markets such as China, where less restrictive legislation has meant more construction of retail outlets and retail chains accounting for a much larger share of total sales,'' Mahajan said in the statement.

Chicago's Oak Street had the largest increase in rents in local currency in the survey as rents doubled in a year for prime space.

``Oak Street has become a very desirable place for retail,'' Jim Downey, senior director, retail services at Cushman, said in the statement. ``Not only is there a limited availability, but the openings of Graaf, Harry Winston, David Yurman have taken the whole street more up market.''

The U.S. economy will grow at an annual rate of 1.5 percent from October through December, less than half the pace of the previous three months, according to the median forecast of economists surveyed by Bloomberg from Nov. 1 to Nov. 8. Consumer spending will rise at a 2 percent rate, also slower than the third quarter in the U.S., the survey showed.


@2007 BLOOMBERG L.P. (http://www.bloomberg.com/apps/news?pid=20601103&sid=aAxIx24Px3X8&refer=us#)

[VivaLFuego]

Sounds about right. Is there a list/ranking accompanying?

[fleonzo]

yeah can we see a list?

Thanks-

[Jularc]

I haven't seen a list yet, but here is story about Canada's two biggest cities...


Cushman & Wakefield LePage says Canadian retail rents cheap


http://communities.canada.com/financialpost/photos/fpposted/images/144306/original.aspx


By Garry Marr

Canadian retailers shouldn’t complain too loudly about expensive rent.

A new study by Cushman & Wakefield LePage places Toronto’s Bloor Street and Vancouver’s Robson Street among some of the cheaper locales to rent retail space.

In a study of the world’s most expensive shopping districts, Canada’s most exclusive shopping areas could only muster a 25th place finish among 44 countries. That was down from 22nd place a year ago.

New York’s Fifth Avenue finished in the top spot with average rents of US$1,500 per square foot per year. Hong’s Kong’s Causeway Bay finished second at US$1,213 per square foot per year and Paris’ Avenue des Champes Elysees was third at US$922.

By comparison, Robson Street and Bloor Street — they finished in a tie — had rents of only US$198 per square foot per year.

“Demand for prime locations along these strips is incredibly high — the trend in both markets is for retailers to expand vertically and to use existing space more creatively,” said John Crombie, senior managing director of Cushman & Wakefield LePage. “Pressure on rental rates is continuing to be strong, despite the high Canadian dollar and the potential for fewer tourists shopping the areas.”

Cushman & Wakefield LePage said there has been very little tenant turnover in the two Canadian shopping strips so there is little chance for any upward movement in average rental rates. The majority of tenants are locked into long-term leases at below market rents.


© 2007 CanWest Interactive, a division of CanWest MediaWorks Publications Inc. (http://communities.canada.com/financialpost/blogs/fpposted/archive/2007/11/14/cushman-wakefield-lepage-says-toronto-retail-rents-cheap.aspx)

[Jularc]

I had to go to their website and register.

http://www.cushwake.com/cwglobal/jsp/publication.jsp?Language=EN

And

https://www.cushwake.com/cwglobal/docviewer/Research_Report_Main_Streets_Across_the_World_2007_EN.pd?id=c12400107p&repositoryKey=CoreRepository&itemDesc=document&_requestid=598508


Top Ten Locations In The Americas:

1. New York City - 5th Avenue - $1,500
2. New York City - Madison Avenue - $1,200
3. New York City - East 57th Street - $900
4. Los Angeles - Rodeo Drive (Beverly Hills) - $600
5. Chicago - North Michigan Avenue - $425
6. San Francisco - Union Square - $400
7. San Francisco - Post Street - $350
8. Chicago - East Oak Street - $350
9. Sao Paulo - Iguatemi Shopping - $200
10. Vancouver - Robson Street - $198

[Jularc]

Top Ten Locations In Europe:

1. Paris - Avenue Des Champs Elysees - $922
2. London - New Bond Street - $813
3. Dublin - Grafton Street - $668
4. London - Oxford Street - $631
5. London - Covent Garden - $582
6. Paris - Rue Du Faubourg St. Honore - $553
7. Paris - Avenue Montaigne - $553
8. Zurich - Bahnhofstrasse - $491
9. London - Brompton Road - $490
10. Athens - Ermou - $451

[Jularc]

Top Ten Locations In Asia:

1. Honk Kong - Causeway Bay - $1,213
2. Tokyo - Ginza - $683
3. Tokyo - Omotesando - $547
4. Sydney - Pitt Street Mall - $489
5. Melbourne - Bourke Street - $473
6. Seoul - Gangnam Station - $431
7. Seoul - Myeongdong - $428
8. Tokyo - Shibuya - $410
9. Brisbane - Queen Street Mall - $378
10. Singapore - Orchard Road - $325

[Jularc]

Top Ten Locations In Africa & The Middle East:

1. Tel Aviv - Ramat Aviv - $134
2. Beirut - ABC Centre Achrafieh - $116
3. Beirut - City Centre (BCD) - $111
4. Tel Aviv - Ayalon Shopping Centre - $102
5. Beirut - Rue Verdun - $93
6. Johannesburg - Sandton City - $81
7. Cape Town - V&A Waterfront - $79
8. Durban - The Pavillion $69
9. Beirut - Rue Hamra - $65
10. Pretoria - Menlyn Park - $61

[Gordo]

Iguatemi Shopping in Sao Paulo? I've been there, and it's a pretty average mall. Crazy that it has higher rents than many of the other high-end shopping districts in Rio, Sao Paulo, Buenos Aires, or Santiago.

[dimondpark]

Iguatemi Shopping in Sao Paulo? I've been there, and it's a pretty average mall. Crazy that it has higher rents than many of the other high-end shopping districts in Rio, Sao Paulo, Buenos Aires, or Santiago.
Iguatemi is a sales per sq ft powerhouse-the sales figures for that mall are among the highest in the world-which is impressive considering how many gigantic malls there are in SP. I agree that it looks plain though. I would have guessed Oscar Freire for Sao Paulo or Masaryk in Mexico City, but Im not really shocked. Iguatemi is like Brazil's version of Ala Moana or South Coast Plaza.

[Jularc]

RETAIL $PACE


By BILL SANDERSON
December 14, 2007

Retail rents are up 26 percent in Manhattan over last year, driving up prices, cutting into profits and forcing stores to be more imaginative about using their space.

Stores and restaurants are paying an average $133 per square foot, up from $106 per square foot in 2006, according to data from the Real Estate Board of New York.

That means the annual rent on a 1,000 square-foot store or restaurant is $133,000 - serious money for retailers operating on slim profit margins.

"There's not a lot of room in the margins to support it," said Ted Potrikus of the Retail Council of New York State. "What happens is, when rents go up, the price goes up."

Rents are rising in all Manhattan neighborhoods, REBNY reports. Average downtown rents are up 18 percent this year, hitting $109 per square foot - the first time that district's rents have eclipsed $100.

But that's cheap compared with the prime shopping corridors in Midtown. Fifth Avenue ground floor rents are a whopping $1,250 per square foot, and Madison Avenue ground floor rents are $1,108 per square foot.

Ground-floor rents soared 107 percent along Broadway around Times Square, to an average $797 per square foot. That was the biggest percentage increase in the city, REBNY said.

New York's high retail rents are forcing companies to put store space in basements - like the Best Buy and Bed Bath & Beyond stores on Broadway across from Lincoln Center.

Barnes and Noble - which rents all but one of its 700 stores nationwide - has had to take an imaginative approach to its city locations, said Chief Operating Officer Mitchell Klipper.

The company in March will close its ground-level store on Sixth Avenue at West 21st Street because renewing the lease was too expensive, Klipper said. But B&N just opened a brand-new store on the second story of a new high-rise residential building in TriBeCa, at the corner of Greenwich and Warren streets.

"A good retailer with a good brand and good signage can get creative," Klipper said. "Rents are going up, but we are still opening more stores."


http://www.nypost.com/seven/12142007/business/retail_pace_792035.htm

[Jularc]

http://www.nypost.com/seven/12142007/photos/biz049.jpg

[Jularc]

Fifth Avenue named priciest retail spot
Asking rents for the famed shopping corridor, which runs from 49th to 59th streets, surged 21% from a year ago to a record $1,250 per square foot in September.


December 13. 2007
By: Kira Bindrim

Manhattan’s top luxury retail corridor along Fifth Ave. remains the most expensive retail strip in Manhattan, according to a recent report.

Asking rents for the famed shopping corridor, which runs from 49th to 59th streets, surged 21% from a year ago to a record $1,250 per square foot in September, according to a report released Thursday by the Real Estate Board of New York.

“Rising tourism, a weak U.S. dollar compared to foreign currency, and the overall eagerness of European retailers to establish a presence in New York, have all contributed to the rising asking rents for retail space in that area and throughout the borough, REBNY President Steven Spinola said in a statement.

Overall, average asking rent for Manhattan retail locations increased 26% to $133 per square foot in September.

An average 1,000-square-foot storefront along Fifth Avenue’s “golden corridor” would run a retailer about $1.5 million a year, Manhattan-based Cushman & Wakefield said in a report last month.

According to REBNY’s report, rents in the Broadway shopping area, between 42nd and 47th streets, saw the biggest jump, more than doubling to $797 per square foot. The second-highest increase was for the area on Broadway from Battery Park to Chambers Street, where asking rents increased 88% to $301 per square foot.

Indeed, sky-high midtown rents and a renaissance downtown have attracted an increasing number of commercial tenants. Average asking rents downtown increased 18% to $109 per square foot, marking the first time rents downtown have crossed the $100 mark.


http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20071213/FREE/71213008/-1/rss01&rssfeed=rss01

[Jularc]

:previous: Hmmm from article above...

According to REBNY’s report, rents in the Broadway shopping area, between 42nd and 47th streets, saw the biggest jump, more than doubling to $797 per square foot.


Then shouldn't this shopping destination in NYC be at #4?

Plus...

The second-highest increase was for the area on Broadway from Battery Park to Chambers Street, where asking rents increased 88% to $301 per square foot.

Should be at #9 aswell. I am not sure how they overlook these retail areas with such rents.


I had to go to their website and register.

http://www.cushwake.com/cwglobal/jsp/publication.jsp?Language=EN

And

https://www.cushwake.com/cwglobal/docviewer/Research_Report_Main_Streets_Across_the_World_2007_EN.pd?id=c12400107p&repositoryKey=CoreRepository&itemDesc=document&_requestid=598508


Top Ten Locations In The Americas:

1. New York City - 5th Avenue - $1,500
2. New York City - Madison Avenue - $1,200
3. New York City - East 57th Street - $900
4. Los Angeles - Rodeo Drive (Beverly Hills) - $600
5. Chicago - North Michigan Avenue - $425
6. San Francisco - Union Square - $400
7. San Francisco - Post Street - $350
8. Chicago - East Oak Street - $350
9. Sao Paulo - Iguatemi Shopping - $200
10. Vancouver - Robson Street - $198

[10023]

:previous: Hmmm from article above...

Then shouldn't this shopping destination in NYC be at #4?

Plus...

Should be at #9 aswell. I am not sure how they overlook these retail areas with such rents.

It could be that there isn't enough retail, or not the right type of retail, in these areas. I can't even think of what's on Broadway from the Battery to Chambers, and Times Square is, well, Times Square. Meaning a bunch of crap like fast food restaurants and the Hershey store, etc. It's not a shopping destination like Fifth, Madison or SoHo. It just gets a lot of foot traffic. And I'm sure that $797 per square foot doesn't include every storefront you see, like the delis and souvenir shops and stuff... just a limited number of "class A" retail locations like the Toys 'R Us, Sephora, etc.

[MolsonExport]

Interesting. It was always the Ginza in Tokyo until the late 1990s.

[Crawford]

I don't think that list shows America's Top 10. They are just giving a sampling of streets from major cities, ranked in order.

I think if you did a list of America's Top 10 they would overwhelmingly or all be in NYC. Union Square in SF might be able to squeeze in the list, but probably no others.

To put it into context, I know that current retail rents on 86th Street in Bay Ridge Brooklyn are around $300 a month. This is not Manhattan, this is obscure outer Brooklyn, yet the shopping district around the 86th Street R subway station gets rents that would put it on the above Top 10 list.

[edluva]

I don't think that list shows America's Top 10. They are just giving a sampling of streets from major cities, ranked in order.

I think if you did a list of America's Top 10 they would overwhelmingly or all be in NYC. Union Square in SF might be able to squeeze in the list, but probably no others..

but Union square is already ranked in that list - and it's cheaper than chicago or los angeles.

[Crawford]

but Union square is already ranked in that list - and it's cheaper than chicago or los angeles.

Yeah, I know, but I have a friend who's a fairly prominent commercial broker locally and he has told me more than once that SF's Union Square currently has the highest rents outside of NYC for U.S. flagship street-level retail.

He could be wrong, but I trust his judgement, at least for the American retail market. It could also be that he is using a different unit of measurement.

For instance, are we talking comparing only the top retail blocks, or are we comparing streets more broadly? Maybe Union Square has higher overall rents than Beverly Hills, but the top two blocks on Rodeo have higher rents than the top two blocks in San Francisco. Also what about comparing blended rates (upper and lower floors) vs. just street level retail? You can get away with multifloor arrangements in some cities, while in other cities it just won't work.

[edluva]

blended rates? i thought a square foot was the same whether on ground floor or the 45th floor.

[ardecila]

^^ Not at all. Ground-floor space with street frontage, 99% of the time, is vastly more valuable than upper-floor space because people passing by can see into ground-floor space. It's built-in advertising. Stores on upper floors have a harder time attracting visitors, since they often don't get to post signs at ground-level, it takes a long walk away from the street to get to those stores, and it may be a confusing route.

In Chicago, we have a "vertical mall" called Chicago Place. It's really kind of ironic, because the further up you go, the more low-market the stores become. The top floor is a food court with McDonalds, Burger King, and other restaurants, and some t-shirt shops that sell really cheap stuff to tourists. If the average price/sq. ft. for Michigan Avenue included this space, it would drag down the price tremendously.