Manhattan retail lease rebound continues but prime storefronts remain vacant

Manhattan retail leasing rebounded smartly from the pandemic and continues to strengthen, according to a detailed survey by the Real Estate Board of New York. Many fewer storefronts in 16 prime “corridors” tracked by the organization were vacant in the second half of 2025 than in the previous six months as Soho, Flatiron and upper Madison Avenue bucked the trend of stagnant or falling rents.But the improvement might not be immediately visible because the areas with the most  vacancies include the highest-profile, heavily-trafficked parts of town — Times Square, Herald Square and Fifth Avenue above East 49th Street.Weaker demand in those districts can give the impression of a Manhattan leasing market softer than it actually is.The surge touches many parts of Manhattan.

Union Square Partnership executive director Julie Stein noted the district “finished 2025 with a formidable 91% storefront occupancy rate.It remains a primary destination for brands that want to be at the intersection of local authenticity and global tourism.”The REBNY survey of the second half of 2025 cited strong demand from international luxury brands, expansions by local names, food-and-beverage tenants and an influx of health-and-fitness tenants that helped make up for the shortfall of traditional stores.“Despite its challenges, Manhattan’s retail market continues to demonstrate a broad-based appeal,” said Keith DeCoster, vice president of market data and policy.He added that the return-to-office and residential conversion trends will lift retail boats going forward.Cushman & Wakefield executive vice chair Joanne Podell shared his optimism.“Brands continue to view the city as the premier market to establish a retail presence, introduce new concepts and strategically grow their business,” she said.Although REBNY cited average asking rents 32% below their overheated peaks during the previous decade, they actually rose in several areas.

Broadway in Soho saw a whopping 2...