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Recovering Space Demand Helps Revive
Asking Rent Momentum in New York City
Tourism gains aid absorption. Retailer competition is beginning to tighten in Manhattan, after a recent, two-year stretch of volatility. While companies' slow return to full office attendance contributed to net relinquishment of retail space in both of the last two years, a rallying tourism sector is helping bring demand back. Visitor spending surpassed pre-pandemic levels in 2023, signaling to retailers an opportunity to capitalize on the metro's recovery long-term. Tenants are expected to move into 700,000 square feet in Manhattan this year as a response, more than making up for the borough's increase in vacant stock over the last 24 months. This demand has the potential to reverse recent rent trends, after the local average asking rate fell by 13.5 percent over the yearlong span ending in March.