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 new U.S. housing market research by Zillow, the combination of rising home prices and interest rates creates a doubly challenging environment for would-be home buyers, making monthly mortgage payments on even modestly priced homes more of a financial burden.
Sales of newly built, single-family homes inched down 1.7 percent in July to a seasonally adjusted annual rate of 627,000 units after an upwardly revised June report. On a year-to-date basis, sales are up 7.2 percent from this time last year.
According to Transwestern's second-quarter 2018 national office market report, continued improvement in the U.S. office sector was due in large part to a strong jobs market with remarkably low overall unemployment of 3.9 percent, and a 1.6 percent annual growth rate in office-using employment.
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.