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Whole Foods has a Whole Lot to do with Manhattan Rent Appreciation

CoStar Market Insights: Whole Foods Stores Impact Housing Costs in Immediate Vicinity
May 22, 2018

The average monthly apartment rent in Manhattan is $3,840 per unit, or $5.07 per square foot, according to CoStar and records. But when you look at the 9,500 market-rate units that are located within one-tenth of a mile of a Whole Foods grocery store, the rate jumps to $4,580 per unit, or $6.03 per square foot.

Whole Foods carefully picks its store locations using demographics as one of many factors. But once the grocery store opens, CoStar data shows that apartment rates continue to appreciate faster than Manhattan as a whole.

For example, it is approaching the one-year anniversary of the Harlem Whole Foods' grand opening. Since July 2017, the apartments in the immediate vicinity have seen a 2-percent change in rent growth, while the rest of Harlem actually underwent a decline in rents during the same time period.

Units within one-tenth of a mile, equating to roughly a two-minute walk, from that new Whole Foods (pictured, above) are averaging monthly rents around $2,440 per month, or $3.80 per square foot. The rest of Harlem is approximately $400 less per month, or $1 per square foot cheaper, on average.

It is no secret that renters are willing to pay a premium for convenience to quality food. With more than 8,000 units currently under construction within a one-mile radius of a Whole Foods in Manhattan, renters will soon have more, and likely more expensive, options.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

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