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Manhattan retail leasing strong in 3rd quarter.

Retail leasing activity in Manhattan has increased sharply during the past 12 months. So reports Benjamin Fox, executive vice president of New Spectrum Realty Services, Inc. in the firm's September retail space analysis. The data base of available stores for rent decreased approximately 12 percent over the previous twelve-month period, from 2,134 stores as available for lease in 1992 versus 1,881 available in 1993.

In addition, New Spectrum's data base revealed a 21.45 percent drop in the amount of retail square footage available for rent within the last twelve-month period. In July of 1992, its listings contained 5.974 million square-feet of space, versus the 4.692 million square-feet posted in the same period this year.

Commenting on the data, Mr. Fox said, "This sharp decrease is likely precipitated by increased leasing velocity over the past twelve months, combined with a drop in taking rents of an eye-opening 30 percent over the last year. For the most part, this trend is quite healthy; I'm optimistic that leasing activity will continue in this vein for the remainder of the year."

The New Spectrum Retail Rent Analysis is compiled from information contained in its data base of over two thousand listings of retail stores available throughout Manhattan.

In determining the average asking rent for retail stores on any particular avenue or street, New Spectrum believes it is imperative to break down rental figures based upon store size.

Due primarily to supply and demand, smaller retail stores traditionally command a higher square-foot value than larger stores. In order, then, to correctly establish an accurate assessment of asking rents for retail stores in a particular market, New Spectrum computes rental averages by using three size categories: 300 to 1,299 square-feet; 1,300 to 4,999 square-feet; and stores over 5,000 square-feet in size.

The spread in the average asking rents for retail store on a designated avenue or street is therefore interpreted with this in mind.

The actual negotiated rent for any retail story in any area or location is ultimately based upon, in addition to "market considerations," subjective factors such as type and quality of building, frontage, use, strength of tenant, and the overall objective of the building owner.

It is not uncommon, therefore, for a particular store lease to be negotiated at up to thirty percent below the "ask" or in some unusual cases, ten to fifteen percent above the "ask."
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Title Annotation:New Spectrum Realty Services Inc. reports on retail leasing activity in New York, New York, September 1993
Publication:Real Estate Weekly
Date:Oct 20, 1993
Words:404
Previous Article:Report: commercial market stabilizes.
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