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By: Hadassa Kalatizadeh
We all remember the sight of vacant and boarded up store fronts that hollowed our streets after the COVID-19 pandemic hit. Even before the pandemic, retail brick- and-mortar stores were suffering from online shopping, down about 10 percent. The ensuing lockdowns escalated the problem.
While we have yet to reach a full recovery, there are new signs of health for Manhattan’s retail leasing scene. It’s been harder to track progress for retail leasing, compared to office space. Reliable data for retail is harder to get. JLL power-broker Richard Hodos says plainly, “It isn’t an exact science.”
As reported by the NY Post, landlords and brokers seem to have growing confidence in the retail market. JLL and Cushman & Wakefield’s third-quarter Manhattan reports both revealed considerably lower storefront availability — 14.7 percent and 13.9 percent respectively.
In 2021, the Manhattan retail vacancy rates had peaked at mid- and upper-20 percent ranges. JLL claims the number of available stores in Manhattan “fell to its lowest level on record.” In some districts, however, the improvement is still hard to see—such as the Flatiron District, which has seen the shuttering of numerous big-box stores. It all depends on how and what you count. CBRE said retail leasing is actually down 25 percent in comparison with the third quarter of 2023.
Still, industry experts say recent transactions show that the worst is behind us. Cushman broker Joanne Podell said, “Activity in most trade areas is really robust. What’s interesting is, I think we are at equilibrium. I don’t think you can define what we are experiencing as either a landlord or a tenant market.” Hodos also piped in, saying many retail corridors are doing very well, noting that “in Soho, it’s very hard to find space on Greene or Prince Streets.”. “It’s been a good year in general for most retail corridors. Rents are lower than pre-pandemic and occupancy costs are more in line with operating costs,” said Hodos.
Per the Post, recent retail activity has included: a lease for 40,000 square feet of space by Bonhams auction house at the former Steinway piano hall at 111 W. 57th St.; Italian fashion brand Moncler took over a sublease of 24,000 sf from UnderArmour at the GM Building; Socceroof inked a lease for 20,000 sf of indoor soccer space at 28 Liberty St.; and Five Iron Golf signed a lease for 15,300 sf at Vornado’s 1291 Sixth Ave. There are also new deals trickling in.
Per the Post, these include: Primark launching its first Manhattan store with 54,000 square feet at 150 W. 34th St. near Penn Station, replacing Old Navy; and Brooks Brothers signing for a 9,500 square-foot store at L&L’s 195 Broadway — in a vote of confidence for the FiDi neighborhood. Per CBRE, new arrivals inking leases also include: Chinese “fast-fashion” brand Urban Revivo’s first US store with 30,000 sf at 513-5155 Broadway; Arte Museum, an immersive art experience, at Chelsea Piers with 51,000 sf; and Monopoly Experience which signed 50,000 square feet at 11 Times Square.
CBRE identified two trends for the third quarter of 2024. “New-to-Market retailers leasing their first brick and mortar outposts in Manhattan” made up 21 percent of quarterly leasing volume, while “big fine art and experiential tenants” were major drivers of activity, CBRE said.
