Manhattan commercial landlords cut asking prices
NEW YORK, Nov 5 (Reuters) - Manhattan commercial landlords are cutting their asking prices for retail space but still believe they can command a premium in the best shopping areas, according to a report by New York realtors.
Overall asking rents for Manhattan retail space are down 3 percent to $129 per square foot as of Sept. 30, according to a report issued on Wednesday by the Real Estate Board of New York, a private industry group.
By neighborhood, the financial district near Wall Street, hardest hit by the current economic crisis, has seen asking rents fall to $251 per square foot as of Sept. 30, compared to $301 per square foot last year.
But retail asking rents for ground floor space along some of Manhattan's prime shopping corridors such as Madison Avenue are up over last year, suggesting that landlords believe these tenants will post holiday sales gains that will help them keep stores open.
"We're bullish on '09. It's not a growth year but we think things will move forward," Fred Posniak, vice president of W&M Properties of New York, said at a meeting of the Real Estate Board.
However, "until holiday sales are over, we won't know the impact," said Cushman & Wakefield broker David Green.
Analysts expect a dismal U.S. holiday shopping season across the country as shoppers concerned with falling home values, job security and rising food prices curtail spending.
The current credit crunch has also led retailers such as Circuit City Stores CC.NCC to begin closing stores, leaving large empty spaces. Circuit City's plans include closing one Manhattan store.
Manhattan landlords should remain confident stores will continue to open new locations, said Karen Bellatoni, an executive at Robert K. Futterman & Associates. "If you're a national chain you have to continue to grow," she said.
Asking rent along Madison Avenue from 57th Street to 72nd Street, an area popular with tourists, rose to $1,143 per square foot as of Sept. 30, compared to $1,108 per square foot the same time last year, the report says. (Reporting by Sarah Coffey; Editing by Gary Hill)
