Every year since 1995, the Fashion Center BID has published a comprehensive economic profile of the District. This year’s report fully reflects the changes in the composition of the Fashion Center and its real estate, and continues to track the impacts of a dynamic economy, which affects the price structure and tenancy within the area.
Download the 2011 Economic Profile (PDF), or read the overview below.
2011 Fashion Center Economic Profile: Overview & Highlights
The Fashion Center’s economic profile covers three main topic areas — employment, real estate conditions and market trends and retail inventory, volume and potential. While the report has been completed on a yearly basis for more than a decade, this year our methodology has changed, as noted in the report. In general, this year’s report provides a more graphical representation of economic trends than previous years, and is intended to provide a narrative which stakeholders and policy makers can use to draw conclusions about the district’s current and future economic viability.
- Total employment increased between 2010 and 2011 at all geographic levels examined. New York State added 144,387 jobs; New York City added 89,743 jobs and Manhattan added 57,274 jobs. However, total employment figures still lag behind pre-economic downturn, 2008 levels.
- Despite gains in total employment, manufacturing employment declined once again. 2,000 manufacturing jobs were lost in New York City over the past year, with 525 jobs lost in Manhattan. Over a five-year period, manufacturing employment has declined 30.2% in New York City and 34.8% in Manhattan.
- The Fashion Center BID area added 2,235 jobs over the past year. Of all the geographic areas analyzed, the BID area is the only one to have a net gain in jobs over a five-year period, adding 4,069 jobs during that span.
- Fashion-related jobs remained steady citywide, in Manhattan and in the BID. New York City added 394 fashion jobs, while Manhattan added 51 jobs and the BID added 70 jobs.
- The Fashion Center BID is the only area analyzed to have added fashion-related jobs over a three-year and five-year period. Over three years, the BID has added 1,096 jobs. Over five years, it has added 1,584 jobs.
- Fashion-related employment accounted for 48.9% of all jobs within the BID. This is a 2.3% proportional decline from the previous year, as the BID added 2,165 non-fashion jobs during that time.
- Hotels, food-serving establishments and film, visual arts and photo studios have fostered much of the area’s new growth.
Real Estate Market
- The Manhattan market, as well as the Midtown and Midtown South submarkets saw across-the-board decreases in office vacancy rates and increases in rental asking rates over the past year. In Manhattan, vacancy rates fell to 7.8% from 8.6% the previous year, while rental rates rose to $50.37/sf from $45.29/sf over the same period, an increase of 11.2%. In Midtown, vacancy dropped from 13.2% to 12.6% over the year, while rents increased from $55.41/sf to $62.23/sf, an increase of 12.3%. Vacancy in Midtown South dropped from 11.2% to 10.2%, with rents increasing from $35.61/sf to $37.80/sf, a spike of 6.1% since the previous year.
- Within the BID area, office space dominates commercial space listed on the market, accounting for 624,582 sf, or 67.3% of the total listed space. On average, office space is offered at $39.32/sf in the area, which compares favorably with the Penn Station submarket. According to Newmark Knight Frank, office spaces in the Penn Station area are offered, on average, at $34.86/sf. Cushman & Wakefield report a $42.06/sf average in the same area, while Grubb & Ellis report $56.18/sf for Class A space and $43.21/sf for Class B space.
- According to the New York City Assessor’s Office, roughly 88% of the Fashion Center BID’s built space is classified as office (62%) or loft-style (38%) buildings. However, an analysis of LoopNet’s commercial listing database revealed that loft spaces are marketed exclusively as office spaces within the BID.
- Compared to traditional office space, loft space is marketed at a discount, with an average asking price of $33.59/sf. By comparison, non-loft office spaces command an asking price of $40.08/sf.
- Industrial/showroom space commands an asking rental rate of $32.64/sf. Retail space averages an asking rate of $89.37/sf ($227.60/sf on the avenues and $50.28/sf on side streets).
- There are currently 24 hotels operating in the district, with another five scheduled to open this year and an additional five to open in subsequent years. Upon total build out, there will be a minimum of 6,053 rooms in the district.
- Over the past year, hotel occupancy rates in Manhattan remained constant, declining 0.1%, from 88.7% to 88.6%. The average daily rate (ADR) increased from $252.33 to $267.16, or 5.9%.
- There is roughly 2,225,338 sf of retail space in the BID area. At an average asking rental rate of $89.37/sf, retail sales volume for the BID area is estimated to be in excess of $801 million.
- Between 2000 and 2010, the BID area’s population grew in size, got younger and saw inflation adjusted increases in per capita and average median incomes. Population increased by 1,624 residents, or 26.7% during the period, while average age decreased by 2.7%, from 33.3 to 32.4. Per capita income increased 15.9%, adjusted for inflation, from $53,189 to $61,626. AMI increased 23.7%, from $65,467 to $80,974.
- Between 2000 and 2010, residential retail potential increased 27.6%, from more than $121 million to nearly $155 million.
- During the same 10-year period, employee retail potential increased by 29.5%, from more than $442 million to more than $572 million.
- If current hotel occupancy rates remain constant, there will be an estimated 5,363 hotel “residents” within the area at any given time, upon total buildout. This population accounts for an additional $83 million in retail potential.
- There are currently five subway stations and six lines serving the BID area, bringing a total of 518,420 people to the area on a daily basis. If the district can capture 2% of that population’s annual expenditure it would add nearly $639 million in retail potential. If the district can capture 5% of the population’s yearly expenditure, it would add more than $1.5 billion.
- District residents, employees and hotel visitors account for more than $810 million in retail potential. However, when adding potential from daily subway riders travelling to the area, retail potential skyrockets to a total ranging between $1.44 and $2.41 billion.