Following ICSC NEW YORK 2025, one of the biggest dealmaking and networking events of the year — the overall retail sentiment for 2026 remains high.
Those thoughts are also shared by Lee Block, president of RTL, a leading brokerage in NYC. Companies in the city are looking at expansion from new-to-market tenants, which includes international interest. In fact, this is something that been "the theme all in the last year," Block told GlobeSt.
But most importantly, retail in the city overall remains a fight for quality, according to Block.
"The better neighborhoods where tenants are performing well are the ones where we're seeing lots of demand," he revealed.
"And properties that we represent in these better neighborhoods are getting a lot of interest, deals are getting done at pretty strong rents."
MADISON AVENUE AND SOHO LEAD THE WAY
He added that the best retail submarkets have been along Madison Avenue and SoHo, which possess strong demand and sales. Not too far behind are Flat Iron and Fifth Avenue, which Block calls "incredibly busy right now." Plus, some more of the Downtown neighborhoods in Manhattan are hot spots for activity.
In the second quarter, JLL reported that retail availability in NYC's Prime markets dropped to its lowest on record, which dates back to 2017. Individually, SoHo's dropped by seven percent year-over-year, while Flatiron/ Union Square and Times Square saw modest declines.
Overall, while headwinds remain with the economy on trade policy and the weak labor market, Block to this point hasn't seen activity in NYC slow down. As of now, he calls them "micro items" affecting the economy. If anything, he thinks tenants will look at this as an opportunity to expand.
"A lot of tenants and maybe their competitors or others in their industry might pause or take a break, and it gives them an opportunity to swoop in and maybe get something for a discount or reposition their brand into a location, whereas they might have been in a B location in the market prior," Block explained.
THE LOW SUPPLY ISN'T IDEAL
However, there was one imperfect factor that Block cited in NYC's retail sector: the lack of supply, particularly in the Upper West and Upper East Sides. Sure, sometimes this is a landlord's dream — but it can be harder to make deals.
"There's not a lot of great inventory for restaurants, and the question is whether operators compromise on the physical location or the physical attributes of the space, as opposed to waiting for something that is more ideal in terms of location for what they're looking for," Block said.
While the supply in the city is tight, Block added that he thinks there's retail potential for opportunities in the boroughs, notably Brooklyn and Queens, which are both seeing strong population growth. Particularly, Williamsburgh is one of the neighborhoods that's expanding.
"I think you have to be opportunistic if it makes sense for your concept or your brand, and there's definitely volume potential in a lot of these submarkets throughout the boroughs and parts of Manhattan that are also getting overlooked," Block emphasized.
But again, NYC's retail sector is a fight for quality — and the best space in terms of classifications remains in high demand, according to Block.
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