Manhattan Retail Vacancies Soar

Tyler Durden's picture

It used to be that taking a 10-minute walk around SoHo meant passing by at least a dozen upstart, trendy fashion retailers eager to sell you a $500 hoodie or $1,000 pair of sneakers.  But these days you're much more likely to see a whole bunch of this:

NYC Vacancies


Manhattan, generally thought to be more resistant to retail cycles than main street America due to its higher income residents and sheer population density, is proving that the combination of the brick-and-mortar retail rout (which we discussed in more depth here), stubbornly high rents and increasing competition from new neighborhoods is taking its toll on the Big Apple's commercial real estate market.  As the New York Times noted earlier today, the retail real estate market in Manhattan is behaving an awfully lot like the luxury condo market with vacancies rising and "foreign money taking a breather."

Once-packed streets are being hit by competition from emerging neighborhoods, and deep discounting from online retailers, according to community officials, landlords and brokers.


“Retailers are experiencing painful adjustments right now, there’s no doubt about it,” said Rafe Evans, a longtime broker with the firm Walker, Malloy and Company. He added that he had struggled to fill some Upper West Side buildings with tenants that last more than a few years.


“It’s like what’s going on with luxury condos — foreign money is taking a breather because of what’s happening with our politics,” said Charles Arnold, an agent seeking a tenant for a 2,200-square-foot store at 605 Madison Avenue, a brick building with gold filigree near East 58th Street. It is being listed at $1,200 a square foot annually, or $220,000 a month.


The space has been available for a year, after Mulberry, a British company that sells leather handbags, closed after a nine-year run, said Mr. Arnold, a managing member of the Misra Group of Companies. Two retail floors upstairs, which formerly housed a hair salon and fitness studio run by the celebrity stylist Julian Farel, are also empty.

And while landlords have attempted to keep rents artificially high for as long as possible, it seems that the excess supply of vacant store frontage is finally starting to take its toll.

Excess supply, of course, tends to soften prices. And the heart of Madison’s shopping district, from East 57th to East 77th Street, where boutiques feature jewelry, suits and stiletto boots, is not immune. In late February, the street had 37 vacancies or stores for rent.


As recently as 2016, annual retail rents averaged $1,800 a square foot, said Faith Hope Consolo, the chairwoman of the retail leasing division at Douglas Elliman Real Estate. Now the average is $1,100, she said.


“There is just too much space coming to the market at the same time, and owners are all vying for the same retailers,” Ms. Consolo said. She added that places like Hudson Yards, a neighborhood that barely existed a few years ago and that is still under development, had pulled tenants away.

As The Real Estate Board of New York recently noted, retails rents in Manhattan are down pretty much across the board with rents in trendy areas like SoHo off around 10% YoY and high-end store frontage on the Upper East Side down a staggering 24%. 

Increasing retail inventory and a slower retail sales environment in New York City have started to affect  ground floor asking rents in Manhattan’s most prominent retail corridors.  The Real Estate Board of New York’s (REBNY) Fall 2016 Manhattan Retail Report shows that average asking rents declined in 11 of the 17 retail corridors surveyed, which is a shift from Spring 2016 when availability was accumulating in some corridors, but the effect on asking rents was subdued.


Madison Avenue, between 57th and 72nd Streets, on the Eastside is one such corridor that is suffering from an increased availability of ground floor retail spaces.  As the corridor’s inventory level rose in Fall 2016, the average asking rent decreased eleven percent to $1,433 per square foot from $1,613 in Fall 2015.  Additionally, an increase in the availability for less expensive ground floor spaces in the corridor caused a 22 percent drop in the median asking rent to $1,350 from $1,728 per square foot last year.


Increased retail inventory has also hurt asking rents Downtown in SoHo, on Broadway between Houston and Broome Streets.  The average asking rent for ground floor space in this corridor fell nine percent to $755 per square foot from $831 last fall. 


Midtown South asking rents in Herald Square on West 34th Street, between Fifth and Seventh Avenues, fell eleven percent year-over-year from $836 to $745 per square foot of ground floor space.  This decline was caused by a combination of increased supply and supply being concentrated on the south side of the corridor.  Spaces on the north side of West 34th Street typically offer wider street frontage, while spaces on the south side are usually smaller and more limited in frontage.

NYC Rents


Meanwhile, Vacant New York created this helpful interactive map that highlights just how pervasive the retail vacancies are around the city. 

If commercial rents are too high for mom-and-pop shops, deep-pocketed national retailers also seem unable, or unwilling, to afford them. Consider the state of Bleecker Street in the West Village, near Seventh Avenue South, a decade-long fashion hub.


One afternoon last month, for-rent signs could be seen in front of more than a dozen spaces, including buildings once occupied by marquee fashion companies like Jimmy Choo (No. 407), Marc Jacobs (No.385) and Ralph Lauren (Nos.381 and 383).


“It’s a difficult time for all retailers,” said Dean Valentino, a managing director at ABS Partners Real Estate, which is listing 381 Bleecker for about $500 a square foot, or $50,000 a month.

NYC Vacancies


Seems the retail rents are just "too damn high."

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AC_Doctor's picture

The SHITSHOW is finally starting to commence.  Real estate, paper investments going to kaboom mutherfucker...

Silver Savior's picture

It's about time. I have especially been waiting for real estate to take a big dump because I can not stand that industry. Everything is too high by atleast 3/4.

Paper Boy's picture
Paper Boy (not verified) Silver Savior Mar 8, 2017 12:58 PM

This is part of why I'm so big on Bitcoin. You don't need retail space to sell it and pump it. It pays to be virtual.

junction's picture

The "Amazon Effect" at work on high end stores.  Some of those landlords are in trouble, they paid too much for their properties and now they have no income from storefronts.  

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) junction Mar 8, 2017 1:27 PM

Algo's don't have to eat out and they don't shop.
(And they don't have to navigate the new Trump Tower security.) 

Silver Savior's picture

Bitcoin was never my thing. I only stay true to gold and silver.

Paper Boy's picture
Paper Boy (not verified) Silver Savior Mar 8, 2017 1:07 PM

Yeah, well you need to change "your thing" stat.

evoila's picture

$500-1,100 per square foot per year is not sustainable. In fact, it is downright stupid. 

Paper Boy's picture
Paper Boy (not verified) evoila Mar 8, 2017 1:15 PM

Yeah maybe these dickweeds need to understand that nobody wants to live with them, nobody wants to look like them, nobody wants to smell like them.

CheapBastard's picture

Retail CEO says the wave of stores closings 'may even accelerate'

Silver Savior's picture

No because any day now I think Bitcoin is all going to be wiped out.

Paper Boy's picture
Paper Boy (not verified) Silver Savior Mar 8, 2017 1:28 PM

Oh yeah and how are they going to do that now genius?

Silver Savior's picture

You and the rest of the sheep herd will find out soon enough. I stay away from shit like that. The dollar is going to collapse too and who will take Bitcoin? They will want silver and gold. To each is their own but I always thought Bitcoin was a horrible idea.

Paper Boy's picture
Paper Boy (not verified) Silver Savior Mar 8, 2017 1:45 PM

When the dollar dies Bitcoin explodes in value. You thought "Bitcoin was a horrible idea" because Satoshi is one of the most brilliant minds in the past thousands of years and you OTOH, are just not very bright....

hound dog vigilante's picture




you have no idea what you're talking about.


nothing against gold & silver (i own plenty), but if you can't see the paradigm-smashing potential of bitcoin, then you can't be helped.

Chris Dakota's picture
Chris Dakota (not verified) mary mary Mar 8, 2017 3:01 PM


use it.




The central planners's picture

If goverment shuts down the principal cryptocurrencies website hubs the bitcoin is screwd no need to shutdown the internet.

SilverRoofer's picture

So are you telling me that no one can dupe or make a Bitcoin out of thin air 

If you don't Hold it You don't Own it

That's my #1 rule 

If the power grid goes down or they shut down the internet as they have done in some countries how do you get your Coins to buy stuff if your locked out?

Kinda like having valuables in a safety deposit box at a bank

How do you get it if the doors are locked?

Paper Boy's picture
Paper Boy (not verified) SilverRoofer Mar 8, 2017 1:31 PM

Nobody can shut down teh Internet. Do you even know what Internet is? How is every electrical, utility company around planet Earth going to shut down at the same time? And then they are going to stay off... forever?

The amount of totally stupid questions makes me wonder if a license to operate a computer isn't such a bad idea?

Silver Savior's picture

The government does not like Bitcoin and they are about to be Bitcoin worst nightmare.

Paper Boy's picture
Paper Boy (not verified) Silver Savior Mar 8, 2017 1:41 PM

Wrong. Government (including Trump's) is totally powerless against Bitcoin. I laugh at them and spit in their general direction.

SilverRoofer's picture

If your stating it can't be done what planet are you on?

Governments can sensor or block access at anytime

There are many web sites blocked all the time

If you don't hold it you don't own it plain and simple


Tactical Joke's picture

Actually I do. If I take the root name servers offline, everything stops. That's easy to do.

Secondly, there are only a few major peering points handling a significant percentage of internet traffic. If I take those down, the other locations can't handle the load, and all hell breaks loose. Not that hard to do.

If I break BGP, I break the internet. Challenging, but BGP was never built with security in mind. Hell, global crossing used to dick up routes all the time, causing havoc.

I've observed every one of these things happen at small scale, and they had disproportionate impacts on the 'net.

I'm not anti-bitcoin, but you don't know as much as you think you know, slick.

hound dog vigilante's picture


this is the same sort of non-sensical crap you get from DollarBunnies...

...but you can't eat gold/silver!

...the grocery store doesn't accept prec. metals!


you sound exactly like those idiots.


bitcoin & monetary metals are NOT mutually exclusive.  They are complimentary.


Working in one's pajamas & slippers for minimum wage ain't exactly 'virtual' work, eh.

The Gun Is Good's picture

But you do need working electronics, internet infrastructure, the grid, etc.... which could all become rather tenuous or turn-off-able in a collapse / emergency situation.

Buck Johnson's picture

They have been artificially keeping realestate up because we all know that most of this realestate has to go down to it's real value which is at least 50% less if not more. 

jus_lite_reading's picture

Actually having lived in Manhattan with my wife for a few years I can tell you that since DeBlowsio came in, crime went up (especially on the UES where the prices have dropped 24%), businesses moved out and generally people suck more than ever. Angry butch dykes everywhere. Even my favorite hole in the wall place to eat in Chelsea turned into a little dive with suckey staff and sucky food.

Rudy was the best Mayor NYC will ever have IMO. Bloomturd was ok until he turned into a libturd in his last 2 years. But DeBlowsio is a white Dinkins. Moral of story - Democrats ruin everything.


froze25's picture

Yes they do, I am pretty close to the city and avoid it like the plague. Its always a pain in the ass and a rip off.

ParkAveFlasher's picture

+1 "White Dinkins"

NYC has totally been flooded with Chicago rejects and SJWs, and illegals from parts unknown.  As a commuter I see snapshots and cross sections of the professional populations daily.  The complexion has changed, but I know that it will change and change again. 



jus_lite_reading's picture

Agreed 10000000%. I'm actually hoping for another Demonrat mayor to finish off NYC now that I'm out.

hotrod's picture

Yes the butch dikes always seem pissed.

The_Dude's picture

The goal of every butch dyke is to make you as miserable as they are. all miserable Marxist do. 

Troll Magnet's picture

NYC was so much better when it was infested with hookers and drug dealers on the streets.  Now it's all "sanitized" and feels like a fuckin' Disneyland.


Oh yeah. $1,100/sqf?  BAHAHAHAHAHAHAHAHAHAHA!  Jews are funny.

hound dog vigilante's picture


ALL of my friends in NYC (long-time residents there) are now moving out or seriously planning to move out soon.


When a city becomes too dirty & dangerous, the families leave.  Without families, much of the service industry collapses, and everything else (retail/wholesale) suffers.


NYC needed only three years to regress from hot property to mass exodus...

jus_lite_reading's picture

I lived there too long, I'm so glad I got out when I did. I'm hoping for another Demonrat mayor to finish it off. America is too big and has too many nice places to live to stay anywhere within 500 miles of that overpriced cesspool.

CheapBastard's picture

New York was actually pretty nice pre-Mayor Lindsey. When he got elected crime soared and every white person and bidniz moved out to NJ if they had any sense. My friend was a cop there while he was Mayor and he got fired for shooting an armed bank robber ... the Libtard Mayor said the cop was wrong to shoot first and shoulds have waited to be shot at before killing the robber.

It was actually the best thing for my friend ever 'caused he moved out of that cesspool to the country where nice people live.

I hear it's pretty nasty there now again with the weekly raping and beating to death in Central Park, and Riverside Drive, etc.

jus_lite_reading's picture

I'm sorry, I'm too young to remember Lindsey but I can assure you that NYC in 2017 is not even the NYC from 2013. DeBlowsio fucked it up that fast. UES is shit, thus you can see the price reflected in the chart -24%! Manhattan has been infested with illegals and undesirables. For a while, Harlem was actually not ***too*** bad, as the yuppies moved up and opened shops. Then DeBlowsio came in and just fucked things up. I mean it's better than it was in the 80's but the trash is starting to come down into upper Manhattan. Daily crime, robbery, attacks, even rapes from the usual suspects.

I'm out in "the burbs" now but I have a remote place which I'm going to make my f/t domecile. Even NJ is turning into an illegal immigrant filthy cesspool of libtards and nasty JINOs

JuliaS's picture

A month ago I started seeing many "for lease" signs pop up all over the place here in Seattle. The signs keep multiplying as if it were fall 2008 all over again, yet MSM is quiet. No maket panic. Post-Christmas bankruptcy wave perhaps?

CPL's picture

Naw, check the obituaries.  Probably the most active section of the NY post.  Note how many Jewish last name are being purged.

hound dog vigilante's picture


all of this while Seattle's streets are flooded with homeless people... tent cities, mattresses on sidewalks... 

if Seattle (and other homeless-friendly cities) doesn't address the problem soon, the tax-paying residents will follow the businesses straight out-of-town.  Book it.

Buck Johnson's picture

Exactly, it's finally coming apart.  And looking at that map is truly telling, it's bloody.  You see if rent is that expensive and I own a company why would I spend 50 to 80 thousand a month on rent when I could just have a good and I do mean good website built and spend that money with experienced email marketers and or SEO (search engine Optimization) etc. etc. and get customers that way.  Hell it would still be cheaper than that monthly rent.



Silver Savior's picture

What's The matter? I thought everything was all roses there and people richie rich. I always knew there were limits to the insanity.

What I really like is when greed takes over. In my town a thirft shop had to relocate because the lease was up and the rent went way up. The thrift shop left and the building sat for two years empty with a for lease sign and eventually Hertz paid the hefty sum because they could. But the dumb bunny property owners had like two years of dead real estate generating property taxes. Ha ha fuck you landlords! 

HenryKissingerChurchill's picture

so they all left the titanic already?

WALLST8MY8BALL's picture

Meanwhile the homeless population here continues to grow. Nice job DeBlameme?no

Mustafa Kemal's picture

Evidently, its also happening with housing. a quarter of a million homes are vacant in NYC.

All this with exploding homelessness.