Manhattan Remains Priciest U.S. Retail Site

Manhattan retail rents have risen 5.4 percent in the last year, to $116 per square foot.

The priciest neighborhood remains Fifth Avenue, according to the retail group at Douglas Elliman Real Estate. (The world’s leader is Hong Kong’s Lan Kwai Fong neighborhood.) And the east side of Fifth Avenue, between 49th and 59th streets – the sunny side – is the most expensive of all, with asking prices of $3500 a square foot, according to a New York Times article.

“The sunny stretch starts with the tourist destinations Saks Fifth Avenue and St. Patrick’s Cathedral,” said the Times, “then continues north with store after store, Cartier, De Beers, Tiffany, F.A.O. Schwarz and Apple.”

Across the street, the asking price drops to a still-expensive $3000 a square foot. In recent years, the west side has become a magnet for mass-market stores, like Uniqlo, Abercrombie & Fitch and H&M. “We get a lot of tourists into Fifth Avenue,” said Larry Meyer, chief operating officer for Uniqlo U.S., which operates a 90,000-square-foot store on Fifth Avenue and 53rd Street, alongside Zara and Hollister. “As basically an embryonic company here in the U.S. [two years ago], we thought it was important to establish that flagship so there was some benefit to suburban stores, as well.”

Madison Avenue, despite its haute-couture reputation, still has lower rents than Fifth, the Times reports. From 57th to 72nd Streets, the west side of the street is priced about $1300 a square foot, and the east side is about $1400.

“The designers all run to Madison because the scale, after you get to 61st, is much easier to digest,” Faith Hope Consolo, an Elliman broker, told the Times. Chanel, Jimmy Choo, Hermès and Prada line up along Madison, with two Ralph Lauren mansions facing each other at 72nd Street.

Above 72nd Street, rents fall to about $700 a square foot, and it becomes “middle to high-end and aspirational retailers there” like Missoni and Lilly Pulitzer, said Susan Kurland, an executive vp with the CBRE commercial real estate group.

The report says the recently trendy Meatpacking District has slipped a bit as a retail haven. With few zoning restrictions, it became a night-life destination instead. Alexander McQueen and Stella McCartney have moved out, replaced by more mass-appeal brands such as Uggs and Patagonia.

“They’re good tenants,” said Kirkland, “but tenants that you would find in every urban setting and in malls.”