Madison Avenue, one of the most well-known shopping corridors in the world, is dotted with luxury brands and has for long been a coveted spot for high-end fashion retailers across the globe.
However, the pandemic seems to have hit the Manhattan shopping district hard as rents declined 17 per cent in the third quarter of the financial year as compared to the previous quarter.
In fact, brokerage firm Cushman & Wakefield says that at the current average of US $ 779 per square feet, the price is down 52 per cent from the peak over the last 5 years.
In 2015, rents on Madison Avenue averaged at US $ 1,607, one of the highest rents in the world but had dropped to US $ 882 in the second quarter.
The past months have seen several store closures and shoppers turning to e-commerce in times of uncertainty, absence of tourists and office workers has also added to the problem.
Another factor governing the fall of rents is the increasing space available as companies shut stores or go bankrupt.
In comparison to Times Square, where rents fell around 5 per cent, Madison Avenue recorded the highest availability rate in the third quarter at 35 per cent while Times Square had 29 per cent space available.
The falling of rents demarcates a significant shift to e-commerce both by consumers and brands in an effort to keep up with the current times. Of the 11 shopping districts that Cushman & Wakefield tracks, only one, Lower Manhattan, performed well enough to see a rise in rents; the rest saw increase in availability of space and decreasing rents.