Rents Falling in New York’s Garment District

NY TIMES -- It may seem counterintuitive that some New York fashion industry workers see a silver lining to the economic downturn — it helps them preserve their toehold in the city’s garment district.

The average asking rents for office space in the district soared 78% in the three years from the end of 2004, peaking at almost $55 a square foot a year in November 2007. But asking rents have fallen back 23% since then, to around $42. That is still much higher than the rents of around $30 that prevailed four years ago.

But current rents are low relative to many other office areas, in part because most of the buildings are old, unrenovated factories. For example, in Times Square, which borders the garment district, the average annual asking rent is $76 a square foot. But Colliers estimates that 85% of the office space in Times Square is in modern well-equipped buildings — classified as Class A space — while only 16% of the garment district is Class A.