Manhattan Retail Vacancies Hit Fresh Record, Weighing Down Rent
(Bloomberg) -- The amount of available retail space in Manhattan jumped to another record, even as pandemic restrictions ease across New York.
The availability rate rose to 28% in the second quarter, the highest in at least 10 years, according to a report from brokerage Jones Lang LaSalle Inc. Much of that was driven by apparel tenants, who accounted for 75% of all new listings, the brokerage said.
The apparel industry, already losing customers to e-commerce before Covid-19, “was hurt disproportionately” by the pandemic, according to Patrick Smith, a vice chairman at JLL.
Manhattan’s retail districts are struggling to bounce back after a pandemic that emptied office buildings and kept tourists home. Even as foot traffic picks up across the city, retail landlords are still struggling to fill the glut of space. New leasing in the second quarter was down 60% from the same period in 2019, JLL said.
Asking rents, meanwhile, fell by an average of 9% from a year earlier across Manhattan’s major shopping corridors. And landlords are using concessions to fill space, offering as many as 10 months free on newly signed deals.
The new economics of New York City are on display in Soho: the swanky neighborhood saw the largest share of new leases, but that came as rent dropped 16% to lead the declines in Manhattan.
Tenants in the restaurant industry accounted for roughly half of all Manhattan retail leasing in the quarter, fueled by warmer weather and relaxed dining restrictions, according to JLL.
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