Retail Vacancy Covid Manhattan New York by Donna Coquilla
New York City is facing record apartment vacancies, leading to lower rents and residents fleeing the city due to a coronavirus pandemic, according to a new report. Vacancy rates in retail in New York’s most populous borough have more than doubled in the past two years, while vacancy rates in the city have risen by nearly 50%, according to a comprehensive report released Wednesday by City Comptroller Scott Stringer.
The analysis shows that retail vacancies are a growing phenomenon, due to changing shopping patterns and city agencies not working to accelerate the opening of new retail outlets. Employment is also affecting retail vacancy, as employment in Manhattan is higher than in other parts of the city, according to the report.
When the New York metropolitan area, which includes commuters from as far away as Pennsylvania, is included, the area’s labor force is 12.34 million, according to the report. Morgan Stanley notes that tenants in Manhattan and other parts of the US are being lured into demanding that rents rise faster than sales, which discourages retailers from signing new leases. Retail rents have fallen, and the minimum wage has risen in recent years from the federal minimum wage of $7.15 in 2008 to $15.00 an hour, in some areas.
What can be done to improve the quality of life of retail workers in New York City and other parts of the US? Introduce a minimum wage of $10 an hour, or about $1.50 an hour for a single person, in line with the US government’s $7.15 hourly wage.
Among other things, hire cashiers, bakery clerks, and deli workers for a minimum wage of at least $10 an hour. If there were a density of independent shops and restaurants, the landscape would change dramatically, as they would suddenly work from home, perfecting the art of distributed teamwork. Below, FN rounds up some of the New York retail chains that have closed this year or plan to close next year.
Retail rents have fallen since the Corona virus struck New York City, but they will continue to fall as retailers struggle to reopen and attract customers over the summer. Real estate analysts predict that the changes in New York retail – changes that serve as a warning sign of what is to come in other major metros – are already beginning to take shape. Compstak’s data on new retail rents confirm that retail tenants in Manhattan continue to pay higher rents on average than their counterparts in the major metro areas. The report analyzes the rents of more than 1,000 retail stores in New Orleans, Chicago and Los Angeles using data from commercial leasing and examines changing trends in the question of rents. Retail rents have also fallen across the country, even in places like California and Florida, despite the “coronaviruses” that have struck New York City. The rents for many of these new leases come from major retailers such as Macy’s (NYSE: M) and Macy’s, among others.
The report is based on data from the U.S. Department of Housing and Urban Development’s Office of Economic Development and includes data on average rents for square feet of retail space in New York City, Chicago and Los Angeles, as well as median rents in each subway area. By aggregating the data at the zip code level from the New York Department of Finance, they can measure what makes up the difference in rents between the top and bottom zip codes of the nation’s major metro stations.
The general trend is that rents for retailers have probably increased in many areas of Manhattan lately, but in some areas they are much lower, reflected in the number of people who live, work, and visit them. While Morgan Stanley’s report covers only a small portion of the New York subway system, there are many other large metro areas on which it is based, such as Chicago, Los Angeles and San Francisco.
These figures may not be entirely comparable, but it seems to me that what is happening in the rest of the region and in the country will cause a lot of confusion.
Stringer’s staff have done a great job analyzing the data and getting to the bottom of why New York City retail vacancy rates have increased so sharply, but what has been missing so far is a data-driven analysis of the real impact of this trend.
Then there is Staten Island, which is much less urban than the rest of the city, has recently experienced less economic and population growth, and now has a retail vacancy rate in double digits. If we have a graph, we would have to estimate this by finding properties that were not submitted as RPE statements and are therefore not considered in our research.
Although Manhattan has neighborhoods with sprawling vacancies, vacancy rates are highest in malls, especially on Staten Island, where vacancy rates are nearly 11 percent. The expansion to malls – such as corridors – has led to a vacancy rate of 6 percent in retail in New York City last year, according to the Census Bureau.
Donna Jean Coquilla September 2020