It may be too early to pop the champagne cork, but Manhattan's massive retail leasing industry is showing strong signs of ending the pandemic carnage.
Even before anyone had heard of COVID-19, online shopping reduced demand for brick-and-mortar stores by perhaps 10%. The lockdown made things even worse.
Readers of this column know that we are skeptical of studies that claim major turnarounds. Reliable data for retail is harder to come by than for offices. “It's not an exact science,” says JLL powerbroker Richard Hodos dryly.
But there appears to be reason to justify increased confidence among landlords and agents in a healthier market.
JLL and Cushman & Wakefield's third-quarter Manhattan survey found in-store inventory levels at 14.7% and 13.9%, respectively, significantly lower than mid-to-high 20% peaks in 2021. It turned out that.
JLL claimed that available store space in the city had “slumped to record lows,” but for anyone who has strolled through the Flatiron district, which has been rocked by multiple big-box store closures, this The numbers are hard to swallow.
It all depends on what and how you count. CBRE said retail leases actually fell by 25% compared to the third quarter of 2023.
However, recent trading lends more than enough credence to the idea that the worst is over.
“Activity in most trade areas is very strong. What's interesting is I think we're in equilibrium,” said Cushman superbroker Joanne Podell. I don't think it can be defined as either a tenant market or a tenant market.
Hodos said: Rents are lower than they were before the pandemic, and occupancy costs are roughly in line with operating costs. ”
He said some regions in particular were “robust and thriving.” In Soho, it is very difficult to find spaces on Green Street or Prince Street. ”
We recently reported for the first time on a major transaction at Bonhams Auction House (40,000 square feet in the former Steinway Piano Hall at 111 W. 57th St.). Italian fashion brand Moncler (24,000 square feet in the GM building, subleased from UnderArmour, never occupied); Five Iron Golf (15,300 square feet at 1291 Sixth Ave. in Vornado). Socceroof (indoor soccer, 20,000 square feet at 28 Liberty St. in Fosun). Carnegie Diner and an unnamed Greek cafe located in the former NHL store at 1185 6th Street in SL Green).
Currently, as with other reports, additional sources and visual observations include:
• London-based clothing giant Primark will open its first 54,000-square-foot Manhattan store at 150 West 34th Street near Penn Station, replacing Old Navy.
• Popular restaurant Rosa Mexicano will take over the former Ed's Chowder House space at the Empire Hotel on West 63rd Street at Broadway. Most of the 12,000 square feet was on the second floor, and it had been dark for six years. Fast-growing Italian chain La Pecora Bianca will replace the former Rosa store on nearby Columbus Avenue.
• Brooks Brothers, the venerable men's clothing manufacturer, has signed on for a 9,500-square-foot store at 195 Broadway in L&L. This is a vote of confidence that FiDi office workers and residents still want to dress up.
• Perhaps the most surprising move is that Joseph Abboud's elegant former home at 424 Madison Avenue will soon become Bagizza's home. — More than 4,000 square feet of bagel/pizza restaurant concept.
CBRE identified two trends for the third quarter.
CBRE said “new entrant retailers leasing Manhattan's first brick-and-mortar stores” accounted for 21% of the quarter's rental volume, with “major art and experiential tenants” being the main driver of activity.
Among the new stores mentioned by CBRE is the previously unreported launch of Chinese “fast fashion” brand Urban Libivo's first U.S. store at 513-5155 Broadway, a 30,000-square-foot store. Also included. In the latter category are the 51,000-square-foot Arte Museum, an immersive art experience on Chelsea Piers, and the 50,000-square-foot Monopoly at 11 Times Square, which developer SJP Properties has long struggled to fill.・It is an experience.
Hodos noted that rents have recovered, although not to pre-pandemic levels. “That's good,” he said. “Ask rents on Madison Avenue, for example, are stratospheric and have not come down even after the pandemic hit.
“The difference between buy and sell prices is now much smaller.”
