NYC Retail Vacancy Drops After Major Leases in Q3 2024: Report
By Isabelle Durso October 7, 2024 3:17 pm
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Retail vacancy rates in New York City have hit record lows as the dark days of the so-called retail apocalypse and the pandemic seem to be in the rearview mirror for brick-and-mortar stores, according to a new report from JLL (JLL).
The availability rate for retail space in the city was just 14.7 percent during the third quarter of 2024, making for a total of only 202 vacant shops and marking the lowest numbers since JLL started keeping records in 2016, the report found. It was also a drop from the 15.3 percent availability rate and 210 vacant stores in the second quarter of the year, according to the data, which was first reported by Crain’s New York Business.
“The retail market in New York City is experiencing buoyancy, driven by a combination of factors like consumer confidence and the return-to-office environments, increasing tourism, and resilient consumer spending,” Patrick Smith, vice chairman of retail at JLL, said in a statement sent to Commercial Observer.
“These trends have had a strong impact on retail absorption in New York City and have also positively impacted the broader economy, creating jobs and stimulating supply chains,” Smith added.
The city’s retail sector had been struggling even before the pandemic, largely due to the rise of e-commerce. In 2019, the availability rate was 21 percent and reached 28 percent at the peak of COVID shutdowns in 2021, according to JLL’s report.
Things didn’t look much better at the start of the year, but that has started to turn around.
During the third quarter of 2024, availability rates on Madison Avenue and near 34th Street/Herald Square — two popular shopping areas in New York City — were 6.4 percent and 33.3 percent, respectively, the report showed. As for Lower Fifth Avenue and SoHo, availability rates fell to record lows of 11.3 percent and 11.5 percent, respectively.
Average asking rents during the third quarter ranged from $238 per square foot in Williamsburg, Brooklyn, to $2,257 per square foot on Upper Fifth Avenue, according to JLL. Those are still below the average asking rents seen pre-pandemic, JLL said.
Major retail leases during the third quarter of 2024 include flex office firm Convene signing a deal for 72,000 square feet at 30 Hudson Yards for a new event venue, and School in the Square taking 60,000 square feet at Arden Group’s 4650 Broadway, according to JLL. There was also Arte Museum’s major 52,000-square-foot lease at Chelsea Piers.
But the biggest deal of the quarter was Yeshiva University’s 32-year lease for 160,000 square feet at 1293 Broadway in Herald Square, which the private Orthodox Jewish university will use for a new health care campus.
The good news for New York City’s retail market comes after a report from Avison Young found Manhattan’s office market has also been doing very well, boasting leasing activity of 23.1 million square feet during the third quarter of 2024, as CO previously reported.
Isabelle Durso can be reached at idurso@commercialobserver.com.
