By: Hellen Zaboulani

Whole Foods has signed a lease for a new store in Manhattan’s East Village, taking advantage of the continued weakness in the city’s retail real estate.

As reported by Realty Check, the leased space has been empty since before the Covid-19 pandemic. The space is located at 409 E. 14th St., and was last opened in December 2019 as an Associated supermarket. Whole Foods, the USDA certified organic grocery chain which is owned by Amazon, has been making strides to roll out a line of smaller-format Whole Foods Market Daily Shops throughout the city. The first of those smaller stores is expected to open later this year at 1175 Third Avenue at East 69th Street.

It is not confirmed what type of market the East 14th Street location will be. The space offers 10,000 square feet at street level and 10,000 more square feet in the basement. It is located in the Stuyvesant Town in the East village, owned by Blackstone. Per the NY Post, the 14th Street block has had trouble with escalating crime and vagrancy, due to the vacancies, even suffering a recent murder at the Avenue A corner. A nearby Trader Joe’s, however, has been very successful despite the troubles.

Whole Foods, the upscale supermarket chain headquartered in Austin, Texas specializes in selling products free from hydrogenated fats and artificial colors, flavors, and preservatives. It currently has 17 stores in the city, and was estimated to have a total of over 500 stores in North America in 2019. Amazon purchased the chain for $13.7 billion in August 2017, endeavoring to grow its grocery line.

The lease reflects Manhattan’s struggling retail scene, which has been in turbulent flux, since the pandemic, and even long before 2020 from seemingly indomitable competition that brick-and mortar stores face from online retailers. With the growth and ease of online shopping, acres and acres of space has been vacated by retailers, banks and pharmacy chains including Duane Reade, Walgreen’s, CVS and Rite Aid. Reliable retail statistics are notoriously hard to come by. New data from the Real Estate Board of New York and CBRE found cause for optimism.

REBNY found strong but “uneven” demand in 16 of Manhattan’s prime corridors, with demand driven by food-and-beverage and apparel retailers. Rents in 10 of those corridors rose above the first half of 2023. The good news was toned down by the fact that rents are still 20% to 30% less than their peak before 2020.

The report by REBNY director of market data and policy Keith DeCoster noted that certain streets and avenues are actually less vacant than they look, often due to delays in construction, licensing and permitting. “Lengthy buildout times sometimes heighten the sense that streets are lined with vacancies,” REBNY said, referring to leased but empty-looking store fronts which can take eight months to over a year before actually opening for business.

CBRE’s Matt Chmielicki agreed on that point, commenting “Counting vacant storefronts isn’t the most scientific way to understand the market.” He confirmed the longer time lapse between signing a lease and opening up, similarly citing permit and construction delays. “It can take forever,” Chmielicki said.