Manhattan’s “prime” retail real estate remained under pressure in the fourth quarter as the once too prominent shopping areas have transformed into “ghost towns.”
According to Bloomberg, retail rents across every major shopping district in the borough are plunging as a revitalization of the local economy continues to stall.
Mayor DeBlasio’s solution to mitigate the virus spread has been restricting or banning indoor capacity at restaurants and limit mass gathering. More government regulation has hindered the local recovery.
As if brick and mortar retail didn’t have enough problems to deal with considering the massive push towards e-commerce during the pandemic, Soho retail rents in the fourth quarter dropped 22% to $290 a square foot over the same period last year, according to a report by brokerage Cushman & Wakefield Plc.
Rents in Soho have been sliding for four years. They may eventually pressure commercial real estate firms who own buildings as higher vacancies and lower rents could reduce rental income, making it harder for them to service mortgages.
Lower Fifth Avenue retail rents in the quarter dropped 20%. Rents in upscale Madison Avenue declined 16%.
Read more: Manhattan Retail Rents Plunge In “Prime” Shopping Areas