Things just get rosier by the day in the world of Manhattan real estate. In their second quarter Retail Research Report, Marcus & Millichap conclude that the island is still one of the top retail investment markets in the world.
The investment-sales firm found that builders will complete 200,000 square feet of new retail space in the borough in this year as opposed to 119,000 square feet last year.
The report also concluded that, because of a healthy economy, demand is increasing for retail space and, as a result, vacancy will drop to 4.7 percent this year. The flip side of that coin is that retail rents will increase to $112.86 per square foot, a 4.5 percent increase over last year.
Perhaps the only thing that the report was a little late on was its projection that there will be increased investment activity uptown, downtown and on the far West Side in coming years.
The full release is below.
RETAIL INVESTMENT MARKETS IN THE WORLD
NEW YORK CITY, June 20, 2007 – Similar to the borough’s vibrant economy, the retail property market in Manhattan continues to exhibit steady fundamentals, according to a second-quarter Retail Research Report released by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm. Although vacancy has inched up recently, the boroughwide rate remains relatively tight at approximately 5 percent.
“While Manhattan remains a top retail investment market nationwide, the borough is specifically favored by buyers who desire storefront properties in heavily trafficked areas,” states Edward Jordan, regional manager of Marcus & Millichap’s Manhattan office.
The following are some of the most significant aspects for the Manhattan Retail Research Report:
· Manhattan employers are expected to create 24,000 jobs this year.
· Builders are expected to complete 200,000 square feet of retail space this year, up from 119,000 square feet last year.
· A vigorous local economy will stimulate demand for retail space, leading to a 30 basis point drop in vacancy to 4.7 percent this year.
· Rents are expected to rise 4.5 percent this year to $112.86 per square foot.
· Areas to watch for intensifying investment activity in the quarters ahead include Uptown, Downtown and the Far West Side, where buyers with longer-range time horizons may move to get ahead of an expected surge in residential construction.
For a copy for the Manhattan Retail Research Report, as well as reports on other markets nationwide, visit our website at www.MarcusMillichap.com.