Despite a boom in development and tourism, life for NYC’s retailers is getting worse and worse.
Douglas Elliman’s head of retail leasing, Faith Hope Consolo, goes so far as to call it “the most challenging retail landscape in my 25 years in real estate,” as she described it in an interview with The New York Times.
Elliman’s recent survey of Manhattan found that 20 percent of storefronts were vacant, compared with the brokerage’s 2016 results that found 7 percent vacancy. Borough president Gale Brewer conducted a study last year that found 188 empty stores along Broadway Avenue alone.
The cause of retail’s tough times depends on who you ask. Mom-and-pop shops say landlords are mercilessly jacking up rents and holding out for corporate chains or new zoning changes to woo developers. But landlords told the Times they were willing to flex on lower-than-market rents, but tenants were hard to find as many retailers are increasingly hesitant to sign long-term leases. As The Real Deal has previously reported, Manhattan rents have been steadily declining.
Making matters worse, a flood of new retail space is just coming online via big developments such as the World Trade Center, Hudson Yards and Brookfield Place, as Consolo points out. Earlier this year, Mayor Bill de Blasio also openly contemplated levying a vacancy tax on landlords.
The one thing everyone can agree on is the future looks bleak. As Marty Landsman, the co-owner of a business on Canal Street put it to the Times: “I’ve been here all my life and it was never high-end, but every store was always occupied. But commercially now, it’s a decimated area.” [NYT]—Erin Hudson