There's a record amount of empty retail space along New York's Fifth Avenue because the rent is too high.
Availability is rising across the borough, according to Cushman & Wakefield's third-quarter report on Manhattan real estate released on Wednesday.
Vacancies rose year-on-year in every submarket that the company tracks, and climbed to 15.9% on Fifth Avenue between 49th and 60th streets. That's the highest availability ever for those streets, according to Bloomberg. The flagship Apple store and Saks Fifth Avenue are along that strip.
The availability rate in Q3 was highest a little farther south along Fifth Avenue, from 42nd to 49th streets, at 29.3%.
At the same time, the asking rents for direct and sublease space fell from a year ago in nine out of the 11 Manhattan retail spaces that Cushman & Wakefield tracks. The exceptions were on Fifth Avenue from 49th to 60th, and in Lower Manhattan.
Prospective renters for both residential and commercial spaces are pushing back on asking prices that exceed what they can afford.
Part of the problem in the commercial space is that there's too much supply and new stores are becoming available daily, according to the report. That's making rents cheaper in most places.
Also, many people are no longer walking into stores to shop — they're instead going to websites like Amazon.
Many traditional retailers are adapting to the shift toward e-commerce, but their margins have suffered in the interim, so the combination of less physical shopping and lower margins has meant that retailers' demand for physical space is less.
Cushman & Wakefield said its outlook for Manhattan's retail market remains strong and should be supported by consumer spending and tourism to New York City's most famous borough.