Midtown has highest retail vacancy rate in NYC: report

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Midtown Manhattan is suffering worse than any other neighborhood in the city when it comes to storefront retail spaces, according to a new real estate industry report.

Nearly 30 percent of storefronts in New York’s prime business district are empty as a “devastating” lack of office workers means there’s not enough customers to keep retailers up-and-running, according to the Real Estate Board of New York.

Those vacancies far outpace empty storefronts in more residential neighborhoods where there’s still a critical mass of people retailers count on.

In Midtown, according to the REBNY report, only about 25 percent to 30 percent of the normal number of workers are coming into the office — meaning about 60,000 people on the streets for lunches, haircuts, shopping or shoeshines. That compares to 180,000 office workers in the area before the pandemic lockdowns.

Such a dearth of people has led to the spike in storefront vacancies — even on key corners and on ritzy Madison Avenue, according to the REBNY report. Some entire blocks are full of empty storefronts.

Chart from REBNY that shows high storefront vacancy rates
Statistics compiled by the Real Estate Board of New York as of this summer show high storefront vacancy rates in neighborhoods that are dependent on office workers. Residential neighborhoods have fared better.

The areas near Grand Central Terminal and in the Midtown East neighborhood have storefront vacancies of 29.9 percent, according to the report. In 2018, storefronts around Grand Central were only 10.9 percent vacant; Midtown East reported a 15.3 percent vacancy at the time.

Those figures jibe with other statistics that show small businesses and retailers, including restaurants and bars, have been among the hardest-hit in the Big Apple, as The Post has reported.

“REBNY’s findings confirm the crippling effect that the pandemic has had – and continues to have – on the retail sector in Midtown Manhattan,” Fred Cerullo, president and CEO of the Grand Central Partnership, said in a statement. “For these businesses to thrive, they need the kind of foot traffic generated by tourists and office workers.” 

Labor Day was supposed to kick off the return to offices, but the Delta variant pushed back many companies’ plans to bring back employees.

A block of stores that are empty.
Midtown has a higher percentage of entire blocks that have vacant storefronts.
Bloomberg via Getty Images

About two-thirds of companies delayed their returns to the office to as far back as early 2022, according to a Gartner study in August, while a recent report from The Partnership for New York found that city employers had expected only 41 percent of office workers to have returned by Sept. 30 — down from a previous estimate of 60 percent. 

The retail sector in some residential neighborhoods in the outer boroughs, meanwhile, have fared much better than those in Manhattan, the report said. The retail vacancy rate in Greenpoint and Prospect Heights in Brooklyn was 14.6 percent; it was 14 percent in Astoria and Sunnyside in Queens.

But retail corridors that depend on office commuters have lagged behind those in residential neighborhoods. Subway ridership as of September has has risen to only 50 percent of pre-pandemic levels, the report notes. And Manhattan accounts for nearly half of the city’s jobs in the retail sector.

A Gap store that closed for good.
Many big chain retailers have contributed to the high retail vacancy rate in Manhattan.
Bloomberg via Getty Images

All of those businesses are big business for New York: The retail sector in 2019 provided 344,600 jobs and contributed $55 billion in taxable sales to the city’s economy, according to the report.

To counter the negative trends, REBNY, which represents the city’s largest real estate interests, recommended the city and state focus on aggressive vaccination policies and encourage employers to bring workers back to the office.

“New York City is still reeling,” the report said. “Restoring the city’s economy will not be complete without the retail sector.”

An empty corner retail space.
The area around Grand Central Terminal and Midtown East has among the most corner retail vacancies.
Getty Images



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