There is “increasing demand from a variety of retailers” on storefronts in Manhattan, the New York Real Estate Board declared in its Spring 2022 survey of retail activity. The claim may be true, but the increased demand does not immediately or necessarily translate into a significant reduction in the number of vacant stores.
The metrics for the past six months cited by REBNY certainly show an improvement. Average rent demand per square foot has grown in nine of the 17 major shopping lanes as of fall 2021 — indicating that the market is stabilizing after two years of lower rents.
Soho and above Madison Avenue are seeing interest from fashion, sportswear, and home décor companies.
One year ago, most of the big new leases were for food and beverage users and fitness users. Swarovski’s new 14,000-square-foot lease at 680 Fifth Avenue not only fills a long, dark space, but is an upscale move from the Gap outlet that once filled the three-story venue.
Another big reclamation in a long dark space is the 26,400-square-foot Taiwanese restaurant Din Tai Fung at 1633 Broadway. The Michelin-starred pasta and dumpling mecca, designed by David Rockwell, is supposed to attract more sophisticated customers than the tourist trap Mars 2112, which closed 100 years early in 2012.
REBNY credits the choppy recovery with increased consumer demand and more visitors to the city despite Omicron, higher transportation costs and concerns about crime.
However, it may be a long time before the Manhattan retail scene fully recovers from the second blow of the pandemic and the online shopping revolution that is starting to take a toll before anyone even hears about COVID-19.
For all new leases, store windows in many areas of Manhattan — both residential and commercial — remain dotted with “Prime Retail Space” signs.
REBNY does not mention retail vacancy rates, which were covered in a separate report later in the year. He asserts instead that the demand for rents has risen or at least has been kept alone in the various lanes.
But as my colleague Keri Byrne wrote recently, the long strips of Broadway seem deserted at sidewalk level. While the Soho part is booming (along with the rest of Soho), Broadway south of Houston Street has a few pricey physical shops outside of hair salons and a few funky art galleries.
Madison Avenue continues to suffer losses from Barneys, Brooks Brothers, and most recently, Harman Kardon. Empty windows haunt pedestrians, especially in the 1960s east.
In fact, empty storefronts outnumber filled storefronts in parts of the FiDi District. The shutdown of Century 21 – which is supposed to reopen with much less space next year – has cast a shadow over the World Trade Center. Fulton Street can boast burgeoning Brookfield and the revamped South Street Seaport at its east and west ends, but between them is a frustrating sea of job vacancies. Even neighborhood fast food places and shoe repair shops have closed and haven’t been replaced yet.
So while it’s legitimate to stress a resurgence, don’t let anyone think that all signs of “for rent” will soon be gone.