Retailers Take Advantage of Steep Rent Discount Opportunities Along Midtown’s 5th Ave

Although for some it may only be short term, a few retailers have been able to take advantage of steep rent discounts along Midtown’s pricey 5th Avenue shopping corridor. While a few of the larger retailers have been able to purchase the locations of their choice, such as Gucci’s $963 million acquisition of 717 Fifth Avenue and Prada’s $822 million deal for 720 and 724 Fifth Avenue, “for smaller retailers willing to rent, there are plenty of options” along 5th Avenue between 49th and 60th Streets where the availability rate is 17% and asking rents fell 4% year-over-year and remain 10% lower than in 2019. In 2022, fast-fashion brand Mango struck a sublease deal at 711 Fifth Avenue with Ralph Lauren at an over 80% discount. Other similar deals cited include the lease for 20,000 square feet at 647 Fifth Avenue secured earlier this year by shapewear brand Skims. The rent for the space formerly occupied by Donatella Versace was less than $200 per square foot, representing at least a 75% discount of the $770 per square foot paid by Versace, which vacated in 2018. The third cited deal is the lease extension secured by Club Monaco at the Charles Scribner’s Son Building, 597 Fifth Avenue. The casual fashion brand leased the approximately 13,000-square-foot space in 2019 under a 3-year term at an asking rent of $1,000 per square foot; and last month, signed an extension through 2031 at $208 per square foot — a nearly 80% discount. While it is clear the upper Midtown stretch of 5th Avenue, which has been described as “New York’s most iconic retail corridor,” is where luxury brands want to be, “retailers are using their bargaining power to negotiate rents that would have been unimaginable not long ago.”