The cost of renting retail space in New York broke all records

Not only rental and purchase of housing, but also commercial real estate remains very expensive in New York. The cost of renting a square foot of retail space in central Manhattan has broken every imaginable record. But while some experts believe that this is one of the main indicators of economic growth and recovery from a prolonged recession, others think that the market may simply be overheated.

Over the past year, the rental price for commercial real estate on the first floor of Fifth Avenue buildings between 49 Street and 59 Street has increased by 20%. As a rule, the most expensive shops and prestigious hotels are located in this area. Today, tenants will have to pay about 3 550 dollars per month for a square foot on the first floor. Only world-known brands and companies operating in the luxury goods market are willing to pay such a price.

“Today we can observe quite optimistic sentiments in the real estate market. With an economy finally picking up, retail space in prime New York City neighborhoods has never been more desirable,” said Michael Slattery, vice president of The Real Estate Board of New York.

Times Square has also experienced a significant increase in the rental prices of commercial real estate. Today, a square foot rental price on the first floor in Times Square is, on average, 2 407 dollars. Over the year, it went up by 11%.

The average rental price for properties on the first floors of Madison Avenue (from 57 Street to 72 Street) is today 1 643 dollars per square foot. Over the past year, the cost of renting real estate in this area has increased by 24%.

If we talk about the average cost of renting commercial real estate in Manhattan, in 2014 it reached 139 dollars per square foot. In 2010, the same figure was 113 dollars. However, one should not forget that when calculating it, it was taken into account both rent in such fashionable parts of the island as Upper East Side, Midtown or Financial District, and in very democratic areas like Washington Heights or Inwood.