You thought your rent was high......

Tim Hayes.

SGF, Supreme Grumble Framer
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Manhattan Retail Rents Rise
By Ian Ritter
Last updated: October 22, 2004 06:18am

NEW YORK CITY-The average retail rents on the 34th Street corridor between Fifth and Seventh avenues in Manhattan shot up 83% in the last year to $299 per sf, according to the Real Estate Board of New York’s fall report. The increase pushes the corridor’s asking rents higher than SoHo, which averaged $179 per sf this year, but at $167 in 2003 were $3 above 34th Street’s.
Overall the total retail square footage in Manhattan climbed from 14.8 million sf to 14.86 million sf. The number of retail stores in the area jumped to 2,407 from 2,278. Rents in the borough shot up $5 during the year, to $97 per sf. Stores with less than 1,000 sf had the highest asking rent, averaging $159 per sf, jumping 7% from last year.

The report, which surveys the ground-floor rents of select neighborhoods in the borough, also found that property owners ask the most in Manhattan, at an average of $770 per sf, on Madison Avenue between 57th and 67th streets. This area was also the borough’s leader in that category last year.

Behind 34th Street’s boom was West 42nd Street, between Sixth and Eighth avenues, where the average rent rose 54% to $243 per sf. The highest top-end of asking rent in all areas was on Fifth Avenue between 49th and 59th streets, where retailers paid at most $1,000 per sf.
REBNY’s report also highlighted the Meatpacking District, south of 14th Street on the West Side and 125th Street in Harlem as improving areas. The report cites Bloomingdales, the Home Depot and Target as national retailers expanding in
 
Tim

Dublin Ireland.....2003

"The 20-year full repairing and insurance lease provides for five- yearly upwards-only rent reviews. The new rent equates to a Zone A level of €13,751 per sq m (€1,275 per sq ft) - more than double the going rate on the street."

Thats about US$1600 per sq ft

See full story below.....

_______________________________________

Arnotts to get over €50 million for Grafton Street investment


The River Island store is to be sold by tender now that its owner, Arnotts, is restructuring. Jack Fagan, Property Editor, reports

The River Island store on Dublin's Grafton Street is to be sold by tender next month following the completion of a new lease agreement at a record rent level.

Agent Druker Fanning & Partners is quoting in excess of €50 million for what is the most important single retail investment to come on the market in recent years.

The double-fronted building near the bottom of Grafton Street is being sold by Arnotts as part of a restructuring of the company which was recently taken private in a €280 million deal.

The sale comes after the giant UK multiple River Island completed contracts to lease the landmark building at a rent of €2.1 million per annum.

The 20-year full repairing and insurance lease provides for five- yearly upwards-only rent reviews. The new rent equates to a Zone A level of €13,751 per sq m (€1,275 per sq ft) - more than double the going rate on the street.

River Island has more than 200 stores in the UK and Ireland and has been trading successfully at number 102/103 Grafton Street for about a decade. One of Arnotts' trading subsidiaries, Impulse, which has also been based in part of the Grafton Street building, is to transfer to Henry Street.

This will allow River Island to have the full use of the entire 1,393 sq m (15,000 sq ft) on six levels.

Three of the floors are in retail use, the ground floor with 321.4 sq m (3,460 sq ft), the basement with 218.3 sq m (2,350 sq ft) and first floor level of 202.2 sq m (2,177 sq ft).

The building is located along one of the busiest stretches of Grafton Street and has a frontage of 44 ft next to jewellers Weir & Sons.

Although the institutions have been mainly sellers rather than buyers in the property investment market this year, it is thought likely that some of them will pitch for River Island, given the high quality of the landmark building and the strength of the covenant.

There is also likely to be interest from pension funds, business consortia and high net worth individuals looking for a secure investment.

Institutions which own most of the buildings on Grafton Street have done exceptionally well in recent years through steady rental and capital growth.

Only three months ago, the Irish Pension Fund Property Unit Trust prepared the ground for another round of rent increases on Grafton Street when it re-let Thorntons chocolate shop to O2 at a Zone A level of €6,201 per sq m (€576 per sq ft), representing an increase of 25 per cent on the old rent.

Though the new Zone A rent agreed for River Island will take traders on the street by surprise, there is little likelihood of it being used as a benchmark for other rent reviews due to be negotiated in the coming months. A general Zone A rent level anywhere near the €13,751 figure agreed for River Island (equating to a Zone A rate of €1,275 per sq ft) would put many of the businesses on the street at risk.

Most of the smaller shops do not have a large enough turnover to justify such a high rent level.

River Island has little or nothing in common with the general run of shops on Grafton Street and for rental reasons can only be compared to BT2 and A Wear, two large stores controlled by Brown Thomas.

Yields on both Grafton Street and Henry Street have been falling steadily in recent years because of intense competition between investors looking for solid long-term growth at a time of continuing uncertainty on stock markets.

Last November, a leading businessman paid over €15 million for 21 and 22 Grafton Street, let to O'Connells Pharmacy and Fields Jewellers.

The purchaser's decision to settle for a return of 3 per cent surprised the market but only for three days. At that stage, an even lower benchmark yield was set - 2.93 per cent - when Lisney completed the sale of the Grafton Pharmacy for just over €6.5 million.

Arnotts, which has owned number 102/103 Grafton Street for decades, surprised the market last month when it paid over €40 million for four shops on Henry Street.

Though the initial yield is expected to be no more than 2.25 per cent, the equivalent yield will probably be at least 3 per cent.

Arnotts' long-term strategy would obviously be to incorporate the four shops into its department store, easily the most successful in the city.

The decision by Arnotts to sell the Grafton Street store is thought to be have been triggered by its plan to invest around €130 million on the expansion of its Henry Street store. The company has acquired an extra two acres of space between Henry Street and Middle Abbey Street, most of it in the head office of Independent Newspapers.

The chairman of Arnotts, Mr Richard Nesbitt, has forecast that the fortunes of Henry Street will be greatly enhanced by the Arnotts expansion and also by the recent opening of the Zara shop.

Source: http://www.ireland.com/newspaper/commercialproperty/2003/1126/688722625CPRIVER26.html
 
I will follow the above by this:

About two months ago the LUAS www.luas.ie a new train/transit system went into operation in Dublin, one of the line terminates at the top of Grafton Street……..traders are reporting that turnover is up by as much a 40% in the general area…….it has made City centre Dublin a one hour journey at the most from where I live….it was up to a 2.5 to 3 hour journey prior to LUAS…..
 
Well, I guess they average more than ten customers a day walking through their little shops. This probably sums up the old adage,"You get what you pay for."

I, on the other hand, only pay 34 cents a foot, yet I average nine or ten customers a day. It is truly amazing the difference a location can make.

John
 
Grafton Street fifth in rent list

October 27, 2004 09:04
A survey of the world's most expensive shopping streets has shown that Grafton Street in Dublin is the fifth most expensive for rents in the world.

London-based research firm CWHB says rents on the street have increased by 46% in the last year. David Hutchings of CWHB told RTE radio Grafton Street had moved up from 18th ten years ago to its current high position, with an annual rent of €4,103 per square meter.

Fifth Avenue in New York topped the list, followed by Paris's Champs Elysees, Hong Kong's Causeway Bay, and London's Oxford Street.

Source: http://www.rte.ie/business/2004/1027/cities.html
 
No Eric, that was cents, not dollars. I have a twenty year lease with an option. This building will take me well into my retirement.

When you run into a good deal, grab it!

John
 
I am a little confused. If someone's rent is $10.00 a foot. Is that per month or year....or lease period?

mithc
 
Sorry, John, around here when you talk about cost per square foot it is based on an annual $ figure.

For example, if a space is 1500 sq ft and they want 2000/month rent it will be advertised as $16/sq ft. (2000*12)/1500

I believe this is a fairly universal terminology in the real estate market.
 
Cliff

That is the way the figure it in NC also.

thumbsup.gif
 
Goes to show ya how much I know, always thought it was per month. Probably means I have passed up some pretty good deals over the years. Oh well, got one now.

John
 
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