Marcus & Millichap

New York City Retail Investment Forecast

Outlook 2019

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Supply Growth Reaches Cycle High as Marquee Offerings Come Online Throughout New York City

Tenant shuffling lifts vacancy moderately higher amid surging rent prices in core submarkets. Amid the resilient New York City economy, the largest annual delivery of retail space within the current cycle will occur in 2019. Headlined by the long-awaited delivery of The Shops & Restaurants at Hudson Yards, the pipeline will contain nearly 1 million square feet of retail space on Staten Island. Other notable projects include the retail portion of Essex Crossing in Soho and Tangram Tower in Flushing, with a combined square footage of nearly three-quarters of a million square feet. Due to the sheer volume of projects coming online — roughly 5 million square feet is expected by year end — vacancy will push higher as retailers rush to take new space, leaving older floor plates to be slowly filled over time. The high-quality offerings coming online will pressure the average asking rent higher in nearby locations, particularly in Midtown Manhattan where vacant floor plates are likely to price well above the metro average.

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