Rents rise along top U.S. retail streets

Most of the sought-after urban retail corridors in the U.S. experienced strong market activity during the first half, as luxury and specialty retailers expanded their brands, according to CB Richard Ellis.

Yearly asking rents on New York City’s Fifth Avenue increased 3.65 percent from last year, to $1,900 per square foot, returning the famed thoroughfare to its 2007 peak, the firm says. Rodeo Drive, in Beverly Hills, Calif., likewise continues to thrive. By year-end, this prime stretch of retail real estate is expected to be 98 percent occupied, as asking rents there continue at about $500 per square foot, CB Richard Ellis says.

Miami’s Lincoln Road posted a 3 percent year-over-year increase, to $165 per square foot. And on Honolulu’s Kalakaua Avenue, asking rents are $260 per square foot, up 8.33 percent from a year ago. Washington’s M Street, in the Georgetown district, saw asking rents surge 13.5 percent year on year, to $105 per square foot.

Asking rents were flat at other top urban retail corridors, including Boston’s Newbury Street ($120 per square foot) and Chicago’s Michigan Avenue ($500 per square foot).

As the economy stays fairly stable, luxury and specialty retailers seek to expand in many of these markets, says Nina Kampler, who heads CB Richard Ellis’ urban retail group for the Americas. “The pronounced decrease in rents and increase in vacancy rates over the past few years have created opportunities for well-positioned retailers,” she said in a prepared statement. “With tightened availability in the best locations, asking rents either stabilized or rose, and tenants have been willing to pay top money for the prime spaces.”

SCTWeek is a free weekly publication of Shopping Centers Today ©, International Council of Shopping Centers, 1221 Avenue of the Americas, New York, NY, 10020; Edmund Mander, Editor-in-chief.

Article taken from SCTWeek Vol. 16 No. 34. For full article visit link below.