Uptown Madison Avenue, lower Fifth Avenue and — surprisingly — a fashionable stretch of Bleecker Street are Manhattan’s hottest retail blocks, according to a revealing new survey of the second half of 2024 by the Real Estate Board of New York.
The report shows renewed leasing energy fueled by fashion stores new to the city, such as Boggi Milano at 527 Madison, which accounted for 20% of major recent deals.
But weakness persists on Midtown Third Avenue and in Times Square and Herald Square.
The city’s retail scene is harder to track than the office market.
Brokerage data isn’t entirely accurate, and often cites vacancy rates lower than the evidence of our eyes. “Rates” can mean little when an availability can refer to 1,000 square feet or 30,000.
But REBNY’s latest survey covering the second half of 2024 dispenses with vacancy rates and instead focuses on meaningful developments in major corridors. It gives us the most revealing snapshot we have.
The report by REBNY research head Keith DeCoster found that “multiple tailwinds” propelled a second-half rally in larger retail deals.
Some were for 80,000 square feet, starting with Ikea on Fifth Avenue, and ending with Burlington on the Sixth Avenue Ladies Mile.
The drivers were a strong jobs market, healthy tourism and “back-to-office momentum,” REBNY found.
The report cautioned that the second-half rally didn’t necessarily imply a sudden boom as many large deals were in negotiations for several quarters.
Despite renewed demand, “asking rent in every corridor except Bleecker Street is at least 10% below its pre-pandemic peak,” according to REBNY.
Among the findings:
- Madison Avenue and Soho remain most in demand. The few availabilities drew multiple offers from investors such as Blackstone, which bought four Soho locations for $200 million.
- Nearly all Madison Avenue storefronts on Madison between 60th and 76th streets are leased, including to Giorgio Armani and Van Cleef & Arpels.
- Seven blocks of Bleecker Street in the West Village, from Seventh Avenue to Hudson Street are nearly fully leased
- Tishman Speyer announced that Rockefeller Center’s retail space is fully leased. A new Eataly Cafe will open this year.
- The opening of SL Green’s One Madison, IBM’s new home, boosted the Flatiron District’s eastern portion. All of the tower’s storefronts are leased, including to Daniel Boulud’s La Tete D’or steakhouse.
- Times Square and Herald Square on the other hand “have struggled to maintain leasing momentum.” Most of the new deals were for fast food restaurants and small, tourist-oriented shops.
- Brooks Brothers’ 10,000 square-foot lease at landmarked 195 Broadway is one of FiDi’s largest apparel commitments in years but it remains to be seen if others will follow.
