{"id":444439,"date":"2025-12-13T12:13:33","date_gmt":"2025-12-13T12:13:33","guid":{"rendered":"https:\/\/www.europesays.com\/us\/444439\/"},"modified":"2025-12-13T12:13:33","modified_gmt":"2025-12-13T12:13:33","slug":"as-prime-spaces-dwindle-nyc-retail-demand-isnt-trickling-down","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/444439\/","title":{"rendered":"As Prime Spaces Dwindle, NYC Retail Demand Isn’t Trickling Down"},"content":{"rendered":"

The good mood was palpable at ICSC’s New York this week,\u00a0with the retail sector\u2019s strong performance<\/a>\u00a0this year, resilient consumer spending and rising rents.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Bisnow\/Ciara Long\n <\/p>\n

\n Crowds at ICSC New York in December 2025\n <\/p>\n

But the K-shaped economic recovery<\/a>, where the highest earners are\u00a0increasing their spending while everyone else tightens their belts, also applies to retail\u00a0landlords.<\/p>\n

The New York City retail\u00a0market is echoing its office counterpart\u2019s recent trajectory, with best-in-class space filling up at lightning speed. But unlike the Manhattan office market, where the lack of trophy availability is\u00a0pushing more tenants<\/a> to\u00a0lower-quality buildings or locations, there is less spillover demand in retail, said Ebere Anokute, CBRE<\/a>\u2019s Americas head of retail research.<\/p>\n

\u201cOwners don’t have as much leverage to push up pricing because retailers don’t necessarily want the space that’s left on the market,\u201d Anokute said from the conference floor at the\u00a0Jacob K. Javits Convention Center.\u00a0<\/p>\n

Retailers hunting for NYC space have spent the past year facing an ever-narrowing array of options. Landlords inked deals for more than 3M SF of retail space<\/a> by September the year, according to the Partnership for New York City<\/a>, pushing vacancy rates toward historic lows.\u00a0<\/p>\n

That pattern continued into Q3<\/a>, according to CBRE\u2019s most recent quarterly report<\/a>: Ground-floor availabilities in the 16 premier shopping corridors tracked by the brokerage were down 7% quarter-over-quarter, while the aggregate four-quarter leasing velocity was up 43% compared to a year earlier.\u00a0<\/p>\n

\u201cWe’ve seen that flight-to-quality<\/a> trend that we saw with office \u2014 and other property types, too \u2014 replicate itself in retail,\u201d Anokute. \u201cWe’re seeing that same sort of stagnation with asking rents as well.\u201d<\/p>\n

Prime retail corridors synonymous with luxury brands have held onto the strong growth that emerged postpandemic. Asking rents have steadily traveled upward of $2,200 a\u00a0SF for the past year on Upper\u00a0Fifth Avenue<\/a>, while availability on Madison Avenue has dropped by 5.5% over the past year,\u00a0Cushman & Wakefield\u2019s Q3 report shows<\/a>.\u00a0<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Bisnow\/Ciara Long\n <\/p>\n

\n CBRE’s Ebere Anokute at the 2025 ICSC New York conference.\n <\/p>\n

But other corridors\u00a0with\u00a0fewer luxury brands\u00a0haven’t kept up. Asking rents dropped 5.9% in the Financial District at the end of Q3, despite vacancy falling by 1.7% year-over-year.\u00a0Herald Square<\/a>\u00a0recorded a 39% retail availability rate in Q3 after tenants, including Forever 21,\u00a0Uniqlo<\/a>\u00a0and Kay Jewelers, vacated large blocks of space,\u00a0Crain\u2019s New York Business reported<\/a>.<\/p>\n

Fewer tenants being interested in retail corridors without luxury brands has a knock-on effect on asking rents for those landlords, brokers said at\u00a0ICSC<\/a>. Consequently, those owners will have to continue structuring leases creatively, with concessions in the form of higher tenant improvement allowances\u00a0and free rent, if they want to fill up their spaces in 2026, Anokute said.<\/p>\n

Savills<\/a>\u00a0President of Leasing for U.S. Retail\u00a0Todd Siegel<\/a>\u00a0said the elite shopping districts nationwide \u2014 like Madison Avenue,\u00a0Rodeo Drive<\/a>\u00a0in Beverly Hills and Oak Street in Chicago \u2014 have essentially filled up.<\/p>\n

\u201cThere is not a lot of vacancy that is A+ vacancy in these marketplaces,\u201d he said. \u201cIt is very difficult for this luxury sector to penetrate a Rodeo [Drive] or an Oak Street.\u201d<\/p>\n

Midwood Investment & Development has roughly 1% vacancy in its nationwide portfolio, which has been expanding to\u00a0markets like Philadelphia<\/a>\u00a0and\u00a0Pittsburgh<\/a>\u00a0but includes properties 92 Prince St. in\u00a0SoHo<\/a>\u00a0and\u00a0the Mill Building in\u00a0Williamsburg<\/a>.<\/p>\n

\u201c2025 got to the point where there wasn’t a lot of really good quality available retail space, and rents have gone up considerably,\u201d said Ron Bondy, Midwood\u2019s executive vice president of leasing. \u201cRetail real estate is at a very, very strong point in general \u2014 not just in New York, but in other markets around the country.\u201d<\/p>\n

In markets without New York’s sprawling urban retail footprint, landlords are holding out for their preferred tenants, taking advantage of the lack of competition,\u00a0Newmark<\/a>\u00a0Head of U.S. Retail Research\u00a0Brandon Isner<\/a>\u00a0said.<\/p>\n

\u201cRetail remains at the near record low availability, and so landlords can be choosier about who they want for their spaces,\u201d he said. \u201cThat’s national.\u201d<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Bisnow\/Ciara Long\n <\/p>\n

\n Midwood’s Ron Bondy at the 2025 ICSC New York conference.\n <\/p>\n

That extends to best-in-class malls and retail complexes, which have tenants queuing up,\u00a0Ripco Real Estate<\/a>\u00a0Partner Gene Spiegelman said.\u00a0<\/p>\n

\u201cThere\u2019s waiting lists for the top shopping centers,\u201d he said.\u00a0<\/p>\n

Tenants are adamant that they only want to be in certain spaces. That might mean they have to adapt their formulas to get the real estate they covet, like\u00a0IKEA<\/a>\u00a0is currently doing in Manhattan.<\/p>\n

The big-box furniture store announced last year it would\u00a0open up shop in 80K SF at the base<\/a>\u00a0of Extell Development Co.’s 570 Fifth Ave. project, purchasing a stake in Gary Barnett\u2019s development to do so. And earlier this year, it\u00a0bought another space<\/a>: a 53K SF SoHo building at 529 Broadway. Those footprints are far below the 300K SF to 450K SF suburban boxes that\u00a0IKEA normally chooses<\/a>.<\/p>\n

\u201cRetailers are definitely having to get creative about the locations that they’re choosing, as well as their store formats,\u201d Anokute said. \u201cThat’s a specific New York trend, with regard to wanting to push store formats smaller and to do more with less.\u201d<\/p>\n

What many brands haven’t yet been willing to do, market experts told\u00a0Bisnow\u00a0at the conference, is take space outside of a prime cluster.<\/p>\n

A handful of luxury\u00a0retailers made splashy moves on Fifth Avenue in the past year \u2014 Prada\u2019s\u00a0$835M purchase<\/a>\u00a0in December 2023, Kering\u2019s $963M acquisition\u00a0a month later<\/a>, LVMH\u2019s\u00a0under-construction new flagship<\/a>\u00a0\u2014 and competition\u00a0has been escalating in SoHo<\/a>.<\/p>\n

But that activity has notably quieted down in recent months.<\/p>\n

“What I’m hearing anecdotally is that [luxury brands are] definitely in a stage of rationalizing their real estate portfolios right now,\u201d Anokute said. \u201cSo I don’t know that we’re going to see super-extensive luxury expansion over the course of the next year, especially in New York.”<\/p>\n","protected":false},"excerpt":{"rendered":"The good mood was palpable at ICSC’s New York this week,\u00a0with the retail sector\u2019s strong performance\u00a0this year, resilient…\n","protected":false},"author":3,"featured_media":444440,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5122],"tags":[5229,15833,7744,108672,204754,61496,149845,204756,181484,204755,405,403,53974,5226,5225,5228,5227,40813,40810,44624,23789,67,586,132,5230,68,2969],"class_list":{"0":"post-444439","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york","8":"tag-america","9":"tag-cbre","10":"tag-fifth-avenue","11":"tag-herald-square","12":"tag-icsc","13":"tag-ikea","14":"tag-k-shaped-economy","15":"tag-k-shaped-recovery","16":"tag-manhattan-fidi","17":"tag-midwood-investment-development","18":"tag-new-york","19":"tag-new-york-city","20":"tag-newmark","21":"tag-newyork","22":"tag-newyorkcity","23":"tag-ny","24":"tag-nyc","25":"tag-nyc-retail","26":"tag-retail-leasing","27":"tag-savills","28":"tag-soho","29":"tag-united-states","30":"tag-united-states-of-america","31":"tag-unitedstates","32":"tag-unitedstatesofamerica","33":"tag-us","34":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115712204411200151","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/444439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=444439"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/444439\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/444440"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=444439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=444439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=444439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}