While the recession is pinching consumer budgets and crushing most of retail, Fifth Avenue’s fashionable real estate has remained surprisingly robust, according to vacancy rates and interviews with industry insiders.
Vacancy rates along Fifth Avenue’s prime shopping district – from Rockefeller Center at 49th Street to the Plaza Hotel at 60th Street – are the lowest in Manhattan, at just 4 percent, according to Cushman & Wakefield. And rents per square foot along the stretch, home to Tiffany & Co. and Bergdorf Goodman, are holding strong at an average $2,180 a foot, the highest in the world.
“It’s denser and more dynamic on Fifth,” said Robin Abrams, vice president at real-estate brokerage Lansco Corp., in comparing the strength of Fifth Avenue to the weakness of the real-estate market just one block to the east, along Madison Avenue.
In fact, Fifth Avenue retail has risen spectacularly over the last five years for one simple reason: foot traffic.
Mayor Bloomberg’s tourism campaign brought 10 million more visitors to New York in 2007 than at the turn of the millennium, and they flocked to Fifth to shop. The same was true last year.
The shopping hordes helped retailers rack up huge revenues. Abercrombie & Fitch remains the poster child for runaway Fifth Avenue success, reportedly ringing up $100 million in annual sales on $8 million in annual rent in 2007.
“Fifth Avenue became the Champs-Élysées of New York,” said Faith Hope Consolo of Prudential Douglas Elliman.
But not even Fifth is immune to the widening economic crisis, as slumping sales last Christmas at Tiffany’s famous flagship made clear. But four massive high-profile retail deals last year will prop up Fifth’s fortunes in 2009.
Crowds of teens are willing to wait on the sidewalk behind a velvet rope for the privilege of shopping at the 30,000 square-foot A&F at 720 Fifth. Armani, Diesel and Tommy Hilfiger are all building huge new Fifth Avenue retail temples, too.