Manhattan’s retail market continued its post-pandemic recovery with a remarkable drop in availability last quarter.
According to a JLL report, only 14.7 percent of prime retail space was available from July to September, the lowest ever recorded in the city. In 2021, the second year of the pandemic, availability peaked at 28 percent.
Just 202 retail spaces in Manhattan were available during the third quarter, a drop from 210 in the previous quarter. This market is much tighter than it was before the pandemic; availability averaged 21 percent in 2019.
The shift is particularly evident on lower Fifth Avenue, where availability rates have dropped from 21 percent in the second quarter of 2023 to a record-low 11.3 percent.
SoHo has also enjoyed a dramatic recovery in terms of vacancy, with availability rates falling from 34.6 percent in 2021 to just 11.5 percent this quarter, according to the JLL report. The current asking rent is $301 per square foot, a modest 3 percent increase year-over-year.
Meanwhile, availability trended upward in some submarkets. Madison Avenue and Williamsburg both experienced slight increases in available space, although they remain tight compared to previous years.
The Meatpacking District continues to face challenges. The availability rate there increased to 26.9 percent, with average asking rents falling 4.5 percent year-over-year to $293 per square foot.
Asking rents have followed mixed patterns. In Times Square they jumped 23 percent year-over-year and 9 percent on upper Fifth Avenue.
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At the same time, asking rents on lower Fifth Avenue and Madison Avenue declined by 18 percent and 13 percent, respectively. The numbers suggest that the market has met demand for spaces, the JLL report said.
Tourism, a crucial driver of Manhattan’s retail economy, has rebounded significantly, contributing to the surge in activity. Hotel occupancy is near record highs, and popular destinations like the Statue of Liberty are seeing visitor numbers close to pre-pandemic levels.