According to CBRE's Q2, 2018 Manhattan Retail Market Report, New York City's retail market continues to evolve as the fundamental demand drivers remain healthy.
Over the past year, average asking rents decreased in 12 of the 16 main Manhattan retail corridors, while the aggregate average asking rent declined by 12.1% to $658 per sq. ft. year-over-year. Across the 16 corridors, 143 spaces have remained on the market for one year or more and 58% of these have been repriced down. Total leasing during the second quarter of 2018 was on par with the prior period, with more than 500,000 sq. ft. of space leased over 98 transactions.
"The decline in retail rent happening in Manhattan is actually encouraging to retailers that are looking for space," said Nicole LaRusso, Director of Research and Analysis for CBRE Tri-State. "It is creating an incentive for tenants to go out into the market and search for opportunities that they might not have found two to three years ago. And, because they need to fill their space, retail landlords are becoming increasingly more flexible when it comes to lease terms."
During the second quarter, the Plaza District was once again the most active neighborhood in terms of sq. ft. leased, followed by the Meatpacking District. The food and beverage category led leasing activity for Q2, with close to 100,000 sq. ft. of transactions closed. Apparel and entertainment segments were also active, with each category closing almost 75,000 sq. ft. during the quarter.
According to CBRE's latest Manhattan Office MarketViews report for the second quarter of 2018, office leasing activity totaled 8.96 million sq. ft. in Q2 2018 and that year-to-date leasing activity totaled 15.36 million sq. ft., 12% higher than the same period last year.
According to a new report from the Mortgage Bankers Association, U.S. mortgage credit availability increased in June 2018. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
According to Redfin, in the first three months of 2018, Denver posted a "net outflow" of Redfin users for the first time, meaning that more Denver-based Redfin users were searching for homes in other metro areas than Redfin users elsewhere looking to move in.
Residential rents are falling due to a rapid increase in rental development in 2018. With a new cycle peak for inventory, rents there, as in much of the nation, will likely maintain a trend of moderation.