New York’s Empty Commercial Spaces Cast a Shroud on Major Commercial Corridors
There is “increasing demand from a wide range of retailers” for storefronts in Manhattan, the Real Estate Board of New York said in its Spring 2022 survey of retail activity. The statement may be true, but growing demand does not immediately or necessarily translate into a sharp reduction in store vacancies.
Measurements from the last six months cited by REBNY clearly show an improvement. Average asking rents per square foot in nine of the 17 major trade corridors have increased from fall 2021, suggesting the market is stabilizing after two years of falling rents.
Soho and Upper Madison Avenue attract the interest of high fashion, sportswear and home decor companies.
A year ago, most 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 step up from the Gap outlet that previously occupied the three-level site.
Another big overhaul in a long, dark place is the 26,400-square-foot affair of Taiwanese restaurant Din Tai Fung at 1633 Broadway. The Michelin-starred noodle and dumpling mecca, to be designed by David Rockwell, is likely to attract a more sophisticated clientele than the Mars 2112 tourist trap, which closed 100 years earlier in 2012.
REBNY attributes the choppy recovery to growing consumer demand and increased visitor numbers to the city despite Omicron, higher transportation costs and concerns about crime.
Even so, it may be a long time before Manhattan’s shopping scene fully rebounds from the pandemic punch and the online shopping revolution that began to take its toll before anyone heard of COVID. -19.
For all new leases, store windows in many parts of Manhattan — residential and commercial — remain full of “Prime Retail Space” signs.
The REBNY does not quote retail vacancy rates, which are covered in a separate report later in the year. He points out rather that the rents requested have increased or at least have been maintained in the various corridors.
But as my colleague Kerry Byrne recently wrote, long stretches of Broadway look abandoned at sidewalk level. While its Soho portion is thriving (as well as the rest of Soho), Broadway south of Houston Street has few actual stores beyond hair salons and a few funky art galleries.
Madison Avenue is still reeling from the losses of Barneys, Brooks Brothers and, more recently, Harman Kardon. Empty windows haunt pedestrians, especially in the 1960s.
Vacant storefronts actually outnumber those filled in some parts of the FiDi area. The closure of Century 21 – which is supposed to reopen with much less space next year – has thrown a veil in front of the World Trade Center. Fulton Street may boast thriving Brookfield Place and the rejuvenated South Street Seaport at its east and west ends, but between them lies a depressing sea of vacancies. Even the neighborhood fast food joints and cobblers have closed and have yet to be replaced.
So while it’s fair to say that a nascent recovery is on the way, we don’t think all those “for rent” signs will soon disappear.