PBS Real Estate details real estate trends reshaping the NYC market

As the economic rebound continues, PBS Real Estate (PBS) recently unveiled a series of new real estate trends that are reshaping the NYC market, including the diversification of key retail destinations, a move to smaller, more efficient space and increased foreign investment activity. "2011 will see big changes on the streets of Manhattan," said Laura Pomerantz, principal of PBS Real Estate. "New and unexpected retailers are transforming shopping dynamics from Madison and Fifth Ave. to Times Sq. and the Upper West Side." Further commenting on the commercial market, John Brod, principal of PBS Real Estate said, "Expect to see a rise in office rental rates driven by pressure from foreign investors, a decline in vacancy rates and a lack of new developments." A Diversification of Key Manhattan Areas: Value Retail is Becoming More Fashionable * Value retailers including Uniqlo and Urban Outfitters are moving up to Fifth Ave., introducing a younger, more contemporary consumer to the area. * Look for a continued transformation of 34th St. Recent leases by Timberland, Desigual, Who A.U. and JC Penney are reinvigorating this longtime shopping destination, with the likes of Uniqlo and other contemporary retailers looking to follow suit. * Times Sq. is becoming a dynamic shopping area. Forever 21, Aeropostale and Disney are leading the charge as retailers look to capitalize on the city's most visited tourist destination. * The Upper West Side will continue to prosper, as the entrance of big box retailers such as Century 21 and EMS will drive additional traffic to the area. * Madison Ave. will offer a new retail mix. Traditionally known as a destination for jewelry, retailers ranging from UGG to Michael Kors are creating a new reason to shop the area. * Expect new retail locations from aspirational brands. Savvy consumers are turning away from luxury and towards aspirational brands like Tory Burch and David Yurman, which will continue to expand with new real estate locations in the area in 2011. * An infusion of international retailers will bring new excitement to the market. The success of retailers such as Topshop, Ted Baker, All Saints and Desiqual is paving the way for others to expand their U.S. presence. The Commercial Office Market Continues to Tighten: Activity Impacted by a Move to More Efficient Space and an Increasing Role by Foreign Investors * Businesses are moving to smaller office space, as technology enables employees to work remotely. By taking smaller leases, companies can reduce real estate costs, while maximizing operating efficiency within the same size workforce. * Foreign investments in area real estate will put pressure on rents to rise. As investors look to diversify their portfolios and classifications, they are turning to area real estate to deliver the greatest R.O.I. * Older buildings will need to renovate to address the latest technological advancements and environmental concerns. With 70% of class A office space built prior to 1975, owners need to adapt to remain relevant, as the focus on technology and the environment have become an everyday requirement. * As a decline in vacancy rates and a lack of new developments fuel demand for space, expect a continued rise in office rental rates through 2014. Class A office space, which has risen to $70.80 in 2011, may reach as high as $84.10 by 2014 (Source: Real Estate Econometrics). * The midtown Manhattan market will experience the most marked recovery, with vacancy rates expected to drop below 9% by the end of this year. PBS Real Estate is a New York-based commercial real estate firm specializing in representing corporate office and retail tenants in New York and throughout major markets across the United States and Europe. Led by principals Laura Pomerantz and John Brod, PBS Real Estate utilizes an extensive network of local and international industry relationships to provide its clients with customized market intelligence and senior level expertise.