New York Retail Market Report
Subdued Return to Office Weighs on Retailers;
Outer Boroughs Note Supply Uptick
Manhattan business districts adjust to reduced commuter base. According to first quarter figures from the Real Estate Board of New York, Manhattan office visitation has plateaued since the latter half of 2022 at roughly 60 percent of the pre-pandemic level. This poses significant implications for retailers in Midtown and Midtown South, the city’s submarkets most reliant on commuter traffic. Both of these areas noted retail vacancy increases of 60 basis points during the first quarter of 2023 alone. Still, visitations to the city are rising, evidenced by subway ridership exceeding 4 million on multiple days during May — the first time this benchmark was passed since early 2020. Some of the borough’s locales even saw improved leasing to kick off 2023, as Downtown Manhattan noted a 5.1 percent vacancy rate in March, the lowest measure in nearly six years.