Increased Rents on Streets with Name Recognition
What’s in a name? Sometimes quite a lot. According to a report by Colliers International, in 2012 streets worldwide with strong name recognition saw double-digit rent increases. For example, Fifth Avenue (New York), Old Bond Street (London), and our very own North Michigan Avenue here in Chicago all saw significant rent increases.
A lot of retailers want to be on the “best” streets — the streets that pull both the locals and the tourists — and that drives the increased rent. In the United States, key streets in Miami and New York saw rent increases of over 30%; in fact, rents on Madison Avenue in New York increased nearly 40%. Key streets in Atlanta and San Diego saw rent increases over 10%.
That’s great news for landlords, and also signifies that retailers are investing more. If retailers feel the increased rents are justified by profits, that’s good news for the economy.