Report: Manhattan Retail Real Estate Prices Jump 26%

Manhattan real estate rental prices jumped significantly during the past year, increasing 26% to $133 a square foot, according to a report released this week by the Real Estate Board of New York.

Every neighborhood surveyed in the report showed an increase in asking rents for retail space compared to last year.

The president of REBNY, Steven Spinola, said the increases show that the city's retail market remains healthy. "This is a strong indication of continuing retail market growth and the strength of the city's economy," he said.

The shopping corridor on Broadway between 42nd and 47th streets had the single largest percentage increase, surging 107% to $797 a square foot of ground floor space. The Times Square shopping area also experienced more than a doubling of its rental fees. The vice president of real estate advisory firm Lansco, Robin Abrams, said that one of the main causes of the rise in prices is the eagerness of European retailers — particularly high-end jewelry and clothing stores — to increase the exposure of their brands by relocating to New York city's high-profile shopping districts.

"With the dollar as low as it is, this is a very good time for international retailers to be coming in," she said. The strength of the euro is giving European retailers an edge over their American counterparts when it comes to winning bids on prime retail space.

"They've been jockeying for space lately, and that has driven rent prices up," Ms. Abrams said. The highest average ground floor prices — $1250 a square foot — were on Fifth Avenue between 49th and 59th streets, home to stores such as Versace, Fortunoff, and Prada.