Madison Avenue Rent Plunges With Manhattan Retail Taking a Hit

(Bloomberg) -- Retail rents on Madison Avenue are plunging as the pandemic hammers Manhattan’s most popular shopping districts.

The high-end shopping shopping corridor, home to luxury brands and swanky boutiques, saw a 17% decline in rent in the third quarter. At an average of $779 a square foot, the price is down 52% from the peak over the past five years, according to the brokerage Cushman & Wakefield.

Rents across Manhattan’s most popular retail districts are plummeting as the pandemic drives store closures and pushes shoppers to the convenience of e-commerce. The absence of tourists and office workers, who are staying home as virus cases rise, is adding to the problem.

Herald Square had an 18% rent drop in the third quarter, while the decline was 5% in nearby Times Square.

There’s also more space available as stores shutter and companies go bankrupt. Madison Avenue recorded the highest availability rate in the third quarter at 35%, the brokerage firm said. In Times Square, 29% of space was available.

Of the 11 shopping areas tracked by Cushman, one saw rent rise: Lower Manhattan was up 4.5%. That area also performed well last quarter.

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