By Kim Galton
The Greenwich retail market continues to evolve as it rebounds from the pandemic, according to a Q1 report from Houlihan Lawrence Commercial.
“While the hospitality business was one of the hardest hit through the pandemic, the resurgence of new restaurant openings has been vigorous, especially on Greenwich Avenue. New openings include Hinoki, Kissaki, Bianca, The Daily Cafe & Eatery, and soon to open, The Cottage. This has brought back vibrancy and foot traffic to Greenwich Ave retail,” said Kim Galton, Director of Retail for Houlihan Lawrence Commercial.
“Other businesses bringing Greenwich back in a bold way include salons and boutique fitness, which have recently opened in Mill Pond Shopping Center, including La Brosse Studio and Family Functional Fitness,” she added.
According to the report, retail vacancies in Greenwich were slightly elevated relative to the five-year average during the second quarter, but they tightened a touch in the past year, according to the report. The 4.5 percent vacancy rate also sits above the overall market’s average.
Other highlights of the report
• Retail rents have fallen on a year-over-year basis, dropping by -1.6%.
• As for construction activity, nothing is currently under development in Greenwich, and inventory has actually contracted over the past three years due to demolitions.
• Retail investors are reasonably active in Greenwich, and that remained the case in the past year. Compared to the overall Stamford area, market pricing sits at $589/SF, which is well above the region’s average pricing. The metro’s market pricing sits down at $291/SF.
• Retail rents in the Greenwich submarket are not cheap and run for about $63/SF triple net on average, which is a considerable premium to the already pricey metro average of $29.00/SF.
• Rent growth has averaged an annual decline of 0.8% over the past three years, with rent performance in the red year-over-year, as well.
“A longer horizon paints a bleak picture on rents, which have decreased at an average annual rate of 0.3% over the past decade. The story doesn’t look all that much better when zoomed out to the metro level, where rents have posted a near-zero average annual change over the past decade,” said Galton.
However, Galton said Greenwich has had a relatively healthy investment market over the years, and buyers have exhibited a steady interest in the area. “The historical interest in Greenwich carried through the past 12 months, as well, and the number of trades largely kept pace with the five-year average,” she noted.
According to the report, annual sales volume has averaged $42.4 million over the past five years, including a 12-month high of $126 million over that stretch. The recorded transaction volume here reached $13.5 million in the past year. The general retail sector drove that volume.
Market pricing, which is based on the price movement of all properties in the submarket, sat at $589/SF during the second quarter of 2022. That price has dropped on a year-over-year basis, but pricing is still elevated well above the average for the Stamford region. In fact, the market price in Greenwich more than doubles the metro’s average. The market cap rate has edged up in the past 12 months to 5.8%, the highest level in five years, which is a tighter yield than the overall region.
Kim Galton is the Director of Retail for Houlihan Lawrence Commercial
