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NYC retail leases reach ‘turning point’ as tourists, office employees return

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Never mind the empty former Barneys constructing, the long-vacant Times Square corner of 701 Broadway at West forty seventh Street and all those other dark storefronts. Manhattan’s pandemic-battered retail leasing market has eventually turned a corner, based on a cheery recent third-quarter report from CBRE.  

The “turning point” included such improved metrics as a median asking-rent uptick (2.2%) over the previous quarter, a major barometer of landlord confidence and the primary such rise for the reason that fourth quarter of 2016; and a 5% decline within the variety of direct-lease ground-floor availabilities in 16 prime corridors tracked by CBRE.

Activity was especially visible within the Grand Central, Flatiron and Union Square areas, based on CBRE, which saw 68,000 square feet and 56,000 square feet of latest deals and renewals, respectively.

Retail landlords and brokers have been buoyed by the tourism and live entertainment revivals and, eventually, a growing variety of employees returning to offices, CBRE reports.

The findings are undeniably excellent news. Even so, CBRE noted that among the recent leases are for pop-ups (e.g., interactive art installation “Immersed in Wonderland” for nine months at 529 Fifth Ave. and short-term sublets (Express for 3 years at 129 Fifth Ave.)

Retail landlords and brokers have been buoyed by the tourism and live entertainment revivals and a growing number of workers returning to offices.Retail landlords and brokers have been buoyed by the tourism and live entertainment revivals and a growing variety of employees returning to offices.Getty Images/iStockphoto

Many “restaurant” deals were for unglamorous fast-casual spots equivalent to Wendy’s replacing Pret a Manger at 24 W. twenty third St.

From Realty Check’s perspective, it’s premature to rejoice when the enormous, former Barneys at Madison Avenue and East sixtieth Street stays vacant and when much of Madison within the East 40s and 50s — which will not be certainly one of CBRE’s tracked corridors — seems to have more empty storefronts than occupied ones.

The 2022 retail scene curiously alternates thriving areas and struggling ones. Broadway between Canal and Houston streets is generally leased together with the remainder of Soho — but Broadway is one other story, if not one other world, south of Canal, where the blocks above City Hall have acres of vacant space.

After all, the retail scene was hurting badly from online shopping long before COVID-19 hollowed out foremost business districts. And the damage isn’t limited to Manhattan.

London is no less than as much of a world shopping mecca as Recent York. Yet after greater than 20 visits to the British capital city through the years, we never saw as many “To Let” signs there as last week. Many were in such distinguished shopping locations as Piccadilly Circus, Knightsbridge and Jermyn Street.

Great cities have a method to go before they again have a retail scene just like the one pre-COVID 19. However the CBRE report makes clear that a rebound, although fitful and incomplete, is underway within the Big Apple.

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