Manhattan Retail Sales, Foot Traffic on the Rise
Concessions landlords are making are bringing in retailers that had steered clear of Manhattan before.
Foot traffic is on the increase in Manhattan, says the Real Estate Board of New York (REBNY) in its Fall 2021 Manhattan Retail Report.
“Foot traffic remains well short of pre-pandemic levels, but the gains of 2021 seem like a sea change from the depths of 2020….. Retailers that previously steered clear of Manhattan are now signing leases,” the study asserts.
The Board points out the Times Square Alliance reported that an average of 227,180 people visited the neighborhood during October, the most since the pandemic while below the 377,318 visitors averaged in 2019
In another upswing indicator, REBNY notes Manhattan retail sales have increased two consecutive quarters, rising by 1.4% to $36.9 billion in the second quarter, then by 3.8% to $38.3 billion in the third quarter.
The welcoming of fully vaccinated international travelers should provide an extra jolt,” says the study.
For upscale residential, the report points out there were 80 sales over $10 million during the first 9 months of 2021, up from 53 in 2020 with new leases over $10,000 achieved its highest market share on record in September.
The increase in people walking past Manhattan store fronts since the decline of the pandemic has yet to materialize in rent hikes.
Since the fall of 2019, the number of ground-level storefronts with an asking rent of $200 per square foot or less has jumped by 132% from 19 to 44. On the other hand, the count of storefronts priced above $1,000 has fallen by 58% from 55 to 23.
With the struggles, REBNY says landlords are showing flexibility with retailers and making exception contributions to buildouts, sensing world-class retail and distinctive experience adds value to their assets and is a draw for foot traffic and top office tenants.
Concessions landlords are making are bringing in retailers that had steered clear of Manhattan and had previously felt they never would be able to afford a location in the district, the study says.
The group expects the increased retail progress to continue in the next six months, but cautioning it remains to be seen how much of an increase in office occupancy will occur.
“This progress is contingent on steady and clear guidance from new City and State leadership in the New Year and the ability to handle the increase in the COVID-19 cases. It also depends on the ability to improve the quality of public life, including improving public safety, across city neighborhoods,” the report says.
It warns the failure to contain COVID-19 or address these other issues would jeopardize the progress already made.
A separate study by Placer.ai lends some hope to Manhattan’s office market as well.
It finds that if current trends hold, the office market in New York City may be on track for a recovery by July 2022.