There's good news on the horizon for renters of commercial properties, but not so much for landlords of properties. Why? New York City is seeing a drop in the cost of rent as a number of new retail locations move into the area.
That's not necessarily a bad thing, since it encourages new retail outlets to open up in the city. However, the average rental rates fell by around 12 percent, meaning that landlords had to be willing to take less.
Property managers suggest that the reason they're taking lower rents is to stimulate activity and interest in the properties. Many businesses had to stop expanding or shut down when the Great Recession hit, but now, real-estate owners are more willing to work with interested renters to fill vacancies. That is, at least until the number of vacancies in the city becomes limited once again.
Which areas are most active for new retailers?
Retailers are finding success in Midtown in the Plaza District, where around 50,000 square feet of commercial space was leased out. Midtown West also saw growth in terms of leasing activity.
New retailers vary by tenant type, but the most common is for new food and beverage tenants to move in. Apparel stores are the second most likely tenants, with sporting goods stores the least likely to move in.
The reality is that this is a great time for renters to look into opening up shop, because rents are lower than they have been in the past. With 143 retail spaces left empty for at least a year, landlords are ready to make deals.