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Flatiron District 4th Quarter Market Update


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Due to high demand and low vacancy rates for ground floor retail space, rental prices in the Flatiron District remain high and stable. The neighborhood continues to have one of the lowest vacancy rates for retail space in the entire city at 7.4%, down from 9.2% in July 2011. We have seen many new retailers opening shop along Fifth Ave, including clothier Joe Fresh, shoemakers New Balance and Sperry Top-Sider, and Big Gulp purveyor 7-Eleven.

A number of retail spaces have been subdivided in order to meet the demand for smaller shops while simultaneously providing less overhead for the tenant. Offering a vast array of culinary delights, Whisk, Pain Quotidien and Flatiron Wines, among several others, will all be opening Flatiron locations in the very near future. They have taken advantage of the new, smaller retail spaces and hopefully can stay in the black against the ever shrinking margins on goods and services that is occurring nationwide.

Part of the allure of the Flatiron District is the well-rounded blend of retail shopping, food-services and business services, with all three averaging a share of the market close to 33%. By comparison, national chains make up approximately 30% of the market while locally-based businesses take the remaining 70%.

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The Flatiron District remains one of the city’s most sought-after locales for office space leasing, and one of the most popular in the entire country as well.  The district continues to be very attractive to small-to-medium sized companies, especially those in creative fields that require open working environments with high ceilings and hardwood floors. Many landlords are investing in their buildings’ futures by prioritizing capital improvements. There’s no bigger example of this than the $30 million investment in 386 Park Avenue South, which included new windows, a beautiful new lobby, and newly renovated restrooms. 300 Park Avenue South also expanded their lobby and entrance, and 50 West 23rd is in the middle of renovations to the interior and exterior of their building. These investments in the future of the Flatiron will help draw new businesses to the neighborhood while sustaining existing demand, which of course is a recipe for escalating rental prices. As you would expect, vacancy rates across Manhattan are lower than the national average, and the Flatiron District remains one of the lowest in the city with only SoHo and Chelsea lower during the 4th Quarter.   Looking for office space in the Flatiron District? Tell us what you need: Office Space in Flatiron District

Mar 7, 2012


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