Retailers Step Up Use of Short-Term Leases
Although long-term leases remain the norm for Manhattan retail space, deals for periods of three years or less have increased sharply, according to CBRE. The firm counted 53 short-term retail deals in 2017, slightly more than quadruple the 13 counted in 2016.
As of second quarter 2018, there were at least 28 short-term deals, keeping pace with 2017’s numbers, according to CBRE. Apparel retailers were most likely to seek such leases.
The Plaza District and Upper Madison Avenue represented nine of the 94 short-term deals seen in the past two-and-a-half years. However, the hotbed for such activity is SoHo, hard hit by the retail sector’s upheaval, CBRE reported.
“The obvious positive on the tenant side is that they can test the market,” CBRE’s Michael Slattery told the Wall Street Journal. For landlords, the benefit is that tenants like the location, they will extend their leases, he said.
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