The New York City real estate market, battered like other economic sectors by the coronavirus pandemic, is seeing lower rates than it has in almost a decade.
That has sent rents falling steeply with no signs of turning around soon. The average retail asking rent fell 9 percent in the first quarter year over year, hitting $714 per square foot, and 13 of the 16 corridors tracked by commercial real estate firm CBRE saw sinking rent prices, CNCC reported.
In Times Square, rent prices are the lowest they’ve been since 2011, being lower than $1,800 for the first time since then at $1,647 per square foot.
Meanwhile, one corridor in SoHo along Broadway has seen rents falling in a steep 30.1 percent drop, landing at $420 per square foot now. Previously, rent there was $600 per square foot. Because of the current conditions, some of the most expensive listings in the area are being discounted as property owners try to hook in new buyers.
The CBRE report, watching all of this unfold, said things were unlikely to bounce back anytime too soon — until social distancing guidelines can be relaxed and people are more apt to be found walking freely outside, the economy will suffer. While the data was from CBRE’s first quarter report, the firm indicated that things haven’t improved in April thus far.
Stores on Fifth Avenue, Madison Avenue and Times Square, usually bastions of activity, are near vacant. This has been the way of things for the past month since social distancing recommendations surfaced as the most basic way to slow the spread of the coronavirus.
In a more recent development, Gov. Andrew Cuomo has extended stay-at-home orders through May 15 as of this week.
CBRE has forecast that the economy may start to recover in the third quarter of this year.
Because of the shutdown, huge swathes of the economy have found themselves unable to pay rent as required. That includes several department stores and high-profile chains.