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Manhattan’s luxury and high-street retail sector has been making headlines frequently in recent months, particularly due to high-profile building trades and the signing of new luxury retail leases, signaling robustness for some parts of Manhattan’s retail market. Among the notable news for luxury and high-street retail in recent weeks:

That’s not all— In late December, WSJ noted Upper Fifth Avenue as the priciest retail street in the world, after Cushman & Wakefield noted that rents topped $2,000 on that corridor, while they still fell short of pre-pandemic levels. In this week’s blog, CompStak delves into how retail rents have trended on Manhattan’s Fifth Avenue, as well as other prime or “high-street” retail corridors in Manhattan as compared to retail transactions in the rest of Manhattan, retail spending data, and trends in New York City tourism that may be bolstering retail performance on these prime corridors.


As noted in a February New York Magazine article, “The Luxury Flagship War on Fifth Avenue,” Fifth Avenue, one of Manhattan’s prime streets for retail, has seen an impressive recovery largely due to the robust growth in U.S. luxury spending. According to data compiled by Statista, U.S. luxury spending, including categories such as leather goods, eyewear, watches & jewelry, fashion, and cosmetics, is anticipated to reach $77 billion in 2024. This level would reflect four consecutive years of increases, after luxury spending dipped moderately in 2020. The report also noted that anticipated annual growth rates would be 1.9% from 2024 through 2028. 

At the same time that the luxury subset of retail spending is on the upswing, overall retail spending is illustrating greater mixed signals according to data from the U.S. Census. According to the latest data available, a possible slowdown in retail activity could be on the horizon as retail sales posted a year-over-year decline in January and missed expectations. However, some have cautioned that curtailed spending activity last month could be partially attributed to weather as winter storms in early January slammed the midwest and northeast. 

Consumers are still spending at restaurants as Food Services and Drinking Places spending posted an increase of 6.3% from a year before, but this was a substantial drop from the 23.4% year-over-year growth posted in January 2023, according to data released by the U.S. Census. Advance Retail Trade, however, posted its first year-over-year decline since May 2020, dropping from 4.5% in December to -0.2% in January. While consumers showed more restraint for spending in restaurants and stores, the Consumer Price Index (CPI) held steady at 3.1% above a year ago, down slightly from December’s 3.3%, which could suggest that consumers are becoming more selective about where they spend their dollars. 

If future months’ retail trade data continues to show declines year over year, it could give the Federal Reserve something to evaluate at their next meeting. A continued and steep enough decline in retail spending could give the Fed the impetus to cut interest rates in the coming months. Interest rate cuts would likely be welcomed by most retail owners and CRE investors.


A recovery in tourism, both international and domestic, is a likely important influence on the robustness of prime retail corridors, especially the luxury stores that populate New York City’s Upper Fifth Avenue. According to NYC & Company, New York City’s official tourism bureau, total visitors (international and domestic) are forecast to surpass 2019 levels in 2024 by just above 2%.  This increase is anticipated to be driven nearly equally by increases in both domestic and international visitors. Not surprisingly, the level of international visitors fell precipitously during the 2021 and 2022 periods, and even during 2022 was down more than than 30.4% from 2019 while domestic was down by just under 11%. In 2024, NYC & Company forecasts that international tourism will comprise more than 20% of total visitors overall. 

While tourism is yielding impressive growth and recovery, office occupancy has largely stagnated in New York City in a likely drag on retail that is located more in office-centric areas and relies on commuter or office worker spending rather than on luxury shoppers or tourists. The New York Metro has an office occupancy rate of 25.8% on its lowest day of the week but reaches 61.1% on its highest day, according to Kastle data.  Of the 10 markets tracked by Kastle, the New York Metro has the 5th highest occupancy on its highest occupied day of the week, as of the latest data available for February 2024. But of these top 10 markets, New York Metro has the second largest gap between occupancy on its highest and lowest day of the week, ranking just behind Chicago’s figures. 

However, the debate ranges on which is the best measure of office occupancy as there are multiple data points available that each measure office occupancy differently and reach different conclusions. The Real Estate Board of New York (REBNY) also tracks visitation but measures it via cell phone activity in Manhattan’s office buildings based on data available from Based on this methodology, visitation averages higher and reached 67% for December overall (latest data currently available), meaning that Manhattan’s building visitation is about 67% of 2019’s level (baseline).


Both high-street and non-high-street retail in Manhattan have recovered from their pandemic lows reached in 2021 following the onset of COVID-19, but only high-street retail maintained that momentum in 2023 as evidenced by starting rental rates. Average starting rents for high-street retail dropped nearly 70% by the end of 2021 from the previous year, according to CompStak data. Non-high-street, though, saw a comparatively smaller decrease of 21.6% year-over-year in 2021 to $134.44 per square foot. One explanation for such a steep drop is the lack of deals occurring during 2021, particularly in high-street retail buildings. The year 2021 accounts for only 8% of all high-street retail transactions from 2018 to 2023 in CompStak data. The highest starting rent of any high-street retail tenant in 2021 was Fila USA, which leased 3,690 square feet at 565 Broadway at $479 per square foot. That figure is significantly lower than the highest starting rent of 2023 in CompStak’s data, which goes to Dolce & Gabbana, who signed a lease for 4,933 square feet at 691-695 Madison Avenue for $2,432.60 per square foot. 2023’s growth can also be illustrated by Chloe’s renewal of their 1,600-square-foot space at 715 Madison Avenue. The designer clothing store signed a one-year lease in 2022 at $462 per square foot and opted to remain in the space for another five years at a starting rent of $719 per square foot, an increase of about 55% from the prior year’s deal.

Following the steep decline in 2021, both high-street and non-high-street retail average start rents returned to positive year-over-year change in 2022. However, average starting rents for non-high-street registered a negative 1.6% year-over-year change year over year while high-street retail posted a 47.2% year-over-year increase from 2022 to 2023.


In addition to luxury retail brands, Prada and Kering’s building purchases on Fifth Avenue, there were also several other notable trades involving high-street retail anchored buildings from 2023 to present, in CompStak’s data. In August 2023, Weybourne Holdings, owner of numerous businesses including Dyson Vacuums, purchased 747 Madison Avenue, where Versace is a tenant through 2029 for about $135 million. In October 2023, Akris purchased the retail portion of 772 Madison Avenue for $40.6 million, where Oscar de la Renta has a retail lease, according to CompStak’s data. Finally, SL Green sold its 583,000-square-foot office tower at 625 Madison Avenue to Related Companies in December 2023. While this isn’t a retail-only transaction, the Class A office building has a lease from Santoni, a luxury shoe retailer, that is in place through 2030 in Madison Avenue’s retail corridor.

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