As Times Square rent surges, there's no peak in sight

It was a rare, solemn day in New York City's Times Square when retailer Toys R Us shuttered its 110,000-square-foot flagship store, burdened by rent that reportedly reached $2,500 per square foot.

Despite that eye-popping price, there's no peak in sight for Times Square rent, one expert told CNBC.

Retailers can expect to keep shelling out for a presence in Times Square because of the exposure it provides, said Robert Futterman, founder of retail leasing and investment sales brokerage firm RKF.

"Times Square is still the No. 1 attraction in the world," Futterman said, speaking to CNBC's "Power Lunch." "For a company like Gap and Old Navy, brand recognition is critical, and the same for a lot of other tenants that are looking to open in Times Square."

Despite the growing importance of e-commerce, the brand recognition provided by Times Square provides a salient example of the advantages of good old brick-and-mortar locations, Futterman said.

"It's still important to have a bricks-and-mortar presence, especially for companies that want to be in the market and express themselves and control their identity," Futterman said.

He said he believes rents will continue to rocket, not only in New York City, but also in other urban shopping districts in cities like Chicago, Los Angeles and Miami.

"There's more and more residential growth," Futterman said. "There's still international tourist growth and domestic tourist growth, so I still think these markets are very, very strong."