New York City’s Fifth Avenue remains an attractive location for retailers — but not at any price.
Rents have been softening and vacancies rising on the famous stretch between Saks Fifth Avenue and the southeast corner of Central Park, home to such luxury brands as Gucci, Rolex and Tiffany, notes The Wall Street Journal. Cushman & Wakefield reports that asking store rents on these blocks were at $2,779 per square foot during the first quarter, down 11 percent from a peak in the first quarter of 2017. Vacancies reached 25 percent in the first quarter, up from 17.4 percent in the first quarter of 2018.
Massimo Dutti is moving out
Several retailers have closed their flagships on Fifth Avenue recently, including Gap Inc. and Tommy Hilfiger, and Spanish retailer Massimo Dutti is about to follow suit, the newspaper reports.
“Even must-have locations must have rents that are rational,” said Kenneth F. Bernstein, president and CEO of Acadia Realty Trust, which owns urban and street-retail property in major U.S. cities, during a recent earnings call.
Tiffany & Co. isn't going anywhere
Some property owners have lowered rents.
“The smart landlords are renegotiating to keep their places lit,” said Nina Kampler, a consultant who works with retailers on restructuring store leases, as reported in the Journal.
By Edmund Mander