New York retail outlook – Q3 2018
After a prolonged period of stagnation, Madison Avenue finally saw some positive activity this past quarter. The corridor exhibited a 14.9 percent year-over-year rent decline in Q3, the second largest decline of all the corridors tracked by JLL Research. This depreciation in rents has caused landlords to adjust expectations and acquiesce to aggressive tenants in the form of generous concession packages, which led to retailers like Celine, Balenciaga, and Schutz signing relocation deals along the avenue. The effects of this activity impacted the rest of the city as well: 29.2 percent of all apparel leases were signed in the Upper East Side, where only 19.2 percent were signed in Q2. SoHo, which typically dominates apparel leasing, was responsible for just 16.6 percent in Q3, down from 26.9 percent the previous quarter. Further, 33.3 percent of all apparel leases fell into the luxury category, which can again be attributed to the tenancy composition and heightened activity on Madison Avenue. In a time when discount retailers are proliferating and luxury retailers such as Henri Bendel have announced massive store closures, the resurgence of retailers of this price point reinforces Madison Avenue’s status as a premier retail destination in New York City.