Manhattan’s Retail Scene Shows Glimmers of Hope
It might be too early to pop the Champagne corks, but Manhattan’s big-picture retail leasing scene shows strong signs of putting the pandemic carnage behind it.
Pandemic’s Impact
Even before anyone heard of COVID-19, online shopping depressed demand for brick-and-mortar stores by perhaps 10%. Lockdowns made things worse. However, recent third-quarter Manhattan surveys by JLL and Cushman & Wakefield found significantly lower storefront availability of 14.7% and 13.9%, respectively, compared with peaks in the mid- and upper-20% ranges in 2021.
Signs of Revival
There seem to be reasons to justify landlords’ and brokers’ growing confidence in a healthier market. JLL claimed the amount of available store space in the city "fell to its lowest level on record," which is hard to swallow for anyone who’s strolled through the Flatiron District, which was rocked by the closing of several big-box stores. It all depends on how and what you count. CBRE said retail leasing was actually down 25% compared with 3Q in 2023.
Tenant and Landlord Markets
Cushman superbroker 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 noted that some areas in particular "are robust and thriving. In Soho, it’s very hard to find space on Greene or Prince Streets."
Recent Transactions
We recently reported major deals for Bonhams auction house, Italian fashion brand Moncler, Five Iron Golf, Socceroof, and Carnegie Diner and an unnamed Greek cafe. Additions include:
- A new bagel/pizza restaurant concept called Bagizza! will soon open at former Joseph Abboud store at 424 Madison Ave.
- London-based clothing giant Primark will launch its first Manhattan store with 54,000 square feet at 150 W. 34th St. near Penn Station, replacing Old Navy.
- Popular eatery Rosa Mexicano is taking over the former Ed’s Chowder House space in the Empire Hotel on Broadway at West 63rd Street — 12,000 square feet, mostly on the second floor, that was dark for six years.
- Fast-growing Italian chain La Pecora Bianca will replace Rosa at its old home on Columbus Avenue nearby.
- Brooks Brothers signed for a 9,500 square-foot store at L&L’s 195 Broadway — a vote of confidence that FiDi office workers and residents still want to dress up.
- The elegant former home of Joseph Abboud at 424 Madison Ave. will soon be home to Bagizza! — a bagel/pizza restaurant concept in more than 4,000 square feet.
CBRE’s Trends
CBRE identified two 3Q trends:
- "New-to-Market retailers leasing their first brick and mortar outposts in Manhattan" accounted for 21% of quarterly leasing volume.
- "Big fine art and experiential tenants" were major drivers of activity.
Conclusion
Rents have recovered, although not to pre-pandemic levels. "And that’s a good thing," said Hodos. "The asking rents on Madison Avenue for example were stratospheric and didn’t even come down after the pandemic hit. Now, the difference between bid and ask is much smaller."
FAQs
Q: Is the retail leasing scene in Manhattan showing signs of recovery?
A: Yes, recent surveys by JLL and Cushman & Wakefield found lower storefront availability than in previous years.
Q: What are the signs of a healthier market?
A: Recent transactions, growing confidence among landlords and brokers, and a reduced difference between bid and ask rents.
Q: What are the trends in the retail market?
A: CBRE identified two key trends: new retailers leasing their first brick-and-mortar outposts and big fine art and experiential tenants driving activity.
