According to the H1 2024 Manhattan Retail Report by the Real Estate Board of New York (REBNY), average asking rents in 10 out of 16 major retail corridors have increased compared to last year. However, none of these corridors have reached their pre-pandemic rent peak.
Brokers who contributed to the report observed a consistent demand for retail space in many areas during the first half of 2024, particularly from food and beverage as well as apparel businesses. This is attributed to increasing office visits and tourist activity. As availability is limited in highly sought-after locations, retailers are expanding into other areas such as Upper West Side and Grand Central.
Despite this positive trend, professionals surveyed for the report noted some ongoing challenges. While there is a high demand for smaller and mid-sized storefronts among potential businesses, there are fewer retailers seeking larger spaces. Additionally, delays in permitting and licensing processes along with elevated buildout costs and restrictive lending practices hinder lease completion and store openings.
Nevertheless, REBNY predicts record tourism over the next few quarters along with an increase in office occupancy rates due to recent economic reforms by City officials will lead towards a favorable outlook for Manhattan’s retail market.
