There is “growing demand from a wide variety of retailers” for storefronts in Manhattan, crows the Real Estate Board of New York in its Spring 2022 survey of retail activity. The claim may be true, but the growing demand does not immediately or necessarily translate into a major reduction in the number of vacant stores.
The statistics quoted by REBNY for the past six months certainly show improvement. Average demanded rents per square meter in nine of the 17 major high streets have risen since the fall of 2021, suggesting that the market is stabilizing after two years of declining rents.
Soho and the upper section of Madison Avenue are seeing interest from high fashion, sportswear and home decor companies.
A year ago, most of the major new leases were for food and beverage and fitness users. A new 14,000-square-foot Swarovski lease at 680 Fifth Ave. not only fills a long dark space, but represents a move to the upper market of the Gap outlet that previously filled the three-level venue.
Another large quarry in a long dark location is the 26,400-square-foot deal of Taiwanese eatery Din Tai Fung at 1633 Broadway. Designed with a Michelin star, the noodle and dumpling mecca is likely to attract a more sophisticated clientele than the tourist trap Mars 2112, which closed 100 years in early 2012.
REBNY attributes the erratic recovery to rising consumer demand and increased visitor numbers to the city despite Omicron, higher transportation costs and crime concerns.
Still, it could be a long time before the Manhattan retail scene fully recovers from the one-two punch of the pandemic and the online shopping revolution that began to take its toll before anyone heard of COVID-19.
For all new leases, shop windows in many Manhattan areas – residential and commercial – will remain cluttered with “Prime Retail Space” signs.
The REBNY does not list vacancy rates in stores, which will be covered in a separate report later in the year. Instead, it emphasizes that the requested rents have risen or at least held up in the various corridors.
But as my colleague Kerry Byrne recently wrote, long stretches of Broadway look deserted at the sidewalk level. While the Soho section thrives (along with the rest of Soho), Broadway south of Houston Street has few real shops outside of hair salons and a few funky art galleries.
Madison Avenue is still reeling from the losses of Barneys, Brooks Brothers and most recently Harman Kardon. Empty windows haunt pedestrians, especially in the East-60s.
In parts of the FiDi area there are even more empty shop windows than the filled ones. The closure of Century 21 — which will reportedly reopen with much less space next year — threw a veil on the World Trade Center. Fulton Street boasts thriving Brookfield Place and the rejuvenated South Street Seaport to the east and west, but in between lies a depressing sea of vacancy. Even nearby fast food restaurants and shoe repair shops are closed and have yet to be replaced.
So while it’s legitimate to claim a nascent recovery is underway, don’t let anyone think that all those “for rent” signs will disappear any time soon.