It’s the Vacancies, Stupid
Matt Chaban Nov. 9, 2010, 2:31 p.m.
As The Observer noted yesterday, retail rents soared recently to more than $1,700 per square foot in Times Square. Whoo hoo. Break out the Champagne because it’s New Year’s in November, baby!
But here comes the Post‘s Steve Cuozzo to crash our party:
Manhattan’s widespread, chronic store vacancies are far more numerous than in other major world cities and were so even before the financial crash two years ago. But the culture of self-congratulation in the retail-leasing industry is so entrenched, it’s almost impossible to get an acknowledgement of how dysfunctional our retail climate can seem to even casual observers.
At many prominent locations, stores remain vacant for years, lending an air of defeat. Think of the Eighth Avenue side of the new Hearst tower; the former Times Square Theater on West 42nd Street, where Marc Ecko walked away from a deal after tying up the site for four years; and huge spaces in the Flatiron district that have stood dark seemingly forever.
REBNY counts 110 million square feet of Manhattan retail space. Yet — strangely for a trade organization so statistically astute — it doesn’t cite a vacancy rate.
We’d guess that’s at least 12 percent overall and far higher in certain parts of town — astonishing in a city blessed with incalculably wealthy shoppers and probably the heaviest sidewalk traffic in the Western world.
When we talked to REBNY yesterday, VP Michael Slattery insisted that vacancies were less of a factor than one might think, and rents still show that Manhattan retailing may not be as bad as it could be.
But at the same time, Cuozzo points to the lack of similar issues in London, that perenial adversary nipping out our Yankee heels. Perhaps instead of patting ourselves on the back and pouring another round of drinks, it is time to get serious and solve this problem.