Whole Foods has signed a lease to open a new store in an East Village space that was vacant before the pandemic, according to Realty Check.
The Amazon-owned market will open at 409 East 14th Street, a space that was previously closed after Associated Supermarkets closed in December 2019, and the company will roll out its line of smaller Whole Foods Market Dairy Shops in the city.
The first store is expected to open later this year at 1175 Third Ave. at East 69th Street.
But it’s unclear exactly what type of storefront the East 14th Street location will be, which will have 10,000 square feet on the ground floor and another 10,000 square feet in the basement.
The space is part of Stuyvesant Town, which is owned by Blackstone.
Whole Foods currently has 17 stores in the city.
The 14th Block has had its share of crime and vagrancy problems, including a recent murder on the corner of Avenue A, but the nearby Trader Joe’s is thriving despite the lawlessness.
Meanwhile, a new Trader Joe’s opened last week in the new Urban League Empowerment Center office building at 123 W. 125th St., a 17,800-square-foot store that bets on central Harlem’s upward trend, and a new 44,000-square-foot Target store is due to open soon.
At the same time, the massive 15,000-square-foot JPMorgan Chase branch at 1251 Sixth Avenue at West 49th Street is scheduled to close in September, leaving a void on the bustling thoroughfare as most employees return to the office.
The situation reflects a Manhattan retail industry in turmoil as it struggles to regain strength after the pandemic and, perhaps more importantly, the online shopping boom that sapped demand for brick-and-mortar stores long before 2020.
That the stores are so full is remarkable, given the damage done by home shopping and the vast amounts of space that banks and companies like Duane Reade, Walgreens, CVS and Rite Aid have dumped into the market.
Reliable retail statistics are notoriously harder to come by than office statistics. “Vacant” can mean 600 sq. ft. vacant or it can mean 60,000 sq. ft. vacant. The most meaningful rents (ground floor rents) are harder to pin down for multi-floor spaces with “mixed” rents.
The optimistic outlook is tempered by the fact that rents remain 20% to 30% lower than pre-2020 peak levels, according to new data from the New York Association of Realtors and CBRE.
REBNY found strong but “uneven” demand across 16 major Manhattan neighborhoods, much of it driven by users in the food and beverage and apparel industries, with rents in 10 of those neighborhoods increasing in the first half of 2023.
Some streets and thoroughfares are much more full than passersby might expect, according to a report by Keith DeCoster, director of market data and policy at REBNY, who said delays in licenses and permits, rising construction costs and lending restrictions can make some properties appear vacant.
“Long construction periods can reinforce the impression that a street is lined with vacant storefronts,” Rebny said. Storefronts that are leased but appear empty can take eight months to a year or more before a tenant opens.
The report noted that the new Mermaid Inn, to be built at 336 Columbus Avenue, has been “planned for over a year” but has been delayed by construction issues.
REBNY cited deals by luxury tenants in Upper Madison, Grand Central and much of SoHo among its major recent new leases.
CBRE’s second-quarter data paints a similarly mixed picture.
A shortage of prime inventory coveted by most luxury and big box retailers has paradoxically slowed leasing, according to CBRE. Overall, the number of vacant ground-floor units available for direct lease fell 19% year over year, according to CBRE’s research.
The areas with the most vacant storefronts were Broadway below Chambers Street (22), 34th Street between Fifth and Seventh Avenues (20), and Broadway from West 72nd Street to West 86th Street (16).
“Counting vacant storefronts is not the most scientific way to understand a market,” said Matt Chmielicki of CBRE. Like REBNY, Chmielicki noted that the time between signing a lease and opening a store is getting longer and longer due to permitting and construction issues.
“It could take forever,” Chmielicki said ruefully.
CBRE said new retailers signed leases for 163,000 square feet in the second quarter, accounting for a third of the total leasing.
Highlighted among them is arts and crafts retailer Hotel Lobby, which opened its first Manhattan store in a 70,000-square-foot space at 270 Greenwich Avenue, formerly home to a Bed Bath & Beyond and Barnes & Noble.
