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NYC Retail Becomes a “Multi-Tiered Marketplace”
The investment outlook for New York City retail isn’t surprising when you look at the sector’s fundamentals. Vacancies are up 40 basis points year over year, according to Marcus & Millichap, while average asking rents dropped by 2.1% in the same time period.
Accordingly, Marcus & Millichap’s new report on New York retail notes, “Declining transactions and overall dollar volume of activity are becoming more apparent, particularly for properties presenting challenges due to tenant mix or lease considerations. This dichotomy has created a multi-tiered investment marketplace, with well-performing assets garnering multiple offers, while struggling centers receive highly discounted offers.”
There are bright spots to be found, and investors are gravitating toward them. “Higher potential returns in Queens, the Bronx and Staten Island are still drawing considerable interest from buyers,” according to Marcus & Millichap. “Broadly, more than 200 basis points of extra yield can be obtained in these boroughs.”
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