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Retail Recovery Diverges by Borough
As Capital Flows Approach Peak Levels
Space absorption poised to improve after a slow year. Brooklyn, Queens, and the Bronx recorded net retail space relinquishment last year, driven largely by bankruptcy-related store closures among big-box tenants. While demand growth in Manhattan remained more resilient, the area of strength is mainly Downtown, as multi-tenant properties in Midtown and Uptown continued to contend with elevated vacancy in late 2025. That said, space demand for urban, small-box retail should continue to outperform, particularly in supply-constrained, high-foot-traffic, and tourism-oriented districts such as SoHo and Union Square. With New York City posting positive net in-migration since 2023 and job creation above most metros, especially in higher-paying sectors, net tenant move-ins should remain, allowing for steady backfilling amid a limited development pipeline as zoning priorities continue to favor multifamily uses.