Fashion’s Rise in NYC’s Times Square, Meatpacking Districts Brings Lease Signings

CBRE Group Inc.’s third-quarter report for 2011 saw strong leasing velocity in Manhattan as a whole, but certain submarkets -- including the Meatpacking District and Times Square -- outperformed expectations.

October 25, 2011
By Nicholas Ziegler, News Editor

Times Square, Courtesy Flickr Creative Commons user ralphunden

It’s full steam ahead for New York City. Experts have been calling the country’s largest metropolitan area a safe haven for some time, a relatively calm harbor for commercial real estate in the economic storm raging around the world, and CBRE Group Inc.’s third-quarter report for 2011 continued that outlook.

“As we predicted earlier, we saw strong leasing velocity through the third quarter, with overall Manhattan leasing activity as of October 1 at 21.77 million square feet, well ahead of same time last year’s 17.24 million square feet,” Matt Van Buren, president of CBRE’s New York tri-state region, said.

While the city saw strong leasing strength across the entire Manhattan area, but there was particular retailer interest in the high-end Fifth Avenue corridor, as well as in Times Square and the Meatpacking District. Susan Kurland, executive vice president of retail, noted that the increasingly fashion-and-design tenanted Meatpacking District had “exploded as a retail destination in less than five years, going from a small, one-industry market to a much in demand, multi-industry market that is bursting at the seams.”

It’s apparent that those fashion-forward brands are actively seeking out new areas of the city, as demand for their products continues to increase despite a gloomy national outook. According to CBRE’s 3Q11 MarketView report, retailers are starting to look at the Soho neighborhood and the Meatpacking District as viable alternatives to Fifth Avenue.

Asking rents for retail space continued to rise throughout most of Manhattan, the highest being in Times Square and Herald Square, two submarkets with limited surveyable venues. Other notable retail corridors experiencing rent increases are Flatiron Fifth Avenue, the Meatpacking District, Upper Madison Avenue and the Upper West Side. Asking rents on Upper Madison Avenue experienced a 12.3 percent increase over second quarter, continuing to draw established fashion designers. Fifth Avenue in the Flatiron neighborhood saw an increase in rents in response to robust leasing activity, including Nike’s nearly 10,000 sq. ft. lease at 156 Fifth Avenue for the company’s new Running Store concept. New area restaurants and retailers such as Serafina, Catch 22 and Vanita Rosa spurred an increase in asking rents on West 14th Street in the Meatpacking District.

Year-to-date leasing in Midtown as a whole was 12 percent ahead of last year’s 11.7 million square feet.