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 24% increase in average asking rents compared with the first half of last year.
Storefront availability is tightest in Soho, upper Madison Avenue, Flatiron, lower Fifth Avenue, and the West Village, REBNY found. Only 13 storefronts were on the market along Madison Avenue between East 57th and East 86 streets – compared with 35 two years ago.
But the report cited “inconsistent” demand in the highest-profile areas, where some vacancies have “lingered on the market.”
Upper Fifth Avenue, Times Square, Herald Square and FiDi comprise a relatively small portion of Manhattan’s retail inventory. Yet, REBNY found, they account for 60% of all the borough’s available storefronts and have the most vacancies of over 10,000 square feet.
Eleven storefronts are up for grabs on Fifth Avenue from East 49th to East 59th, including several such as 697-703 Fifth Ave. that have been empty more than a year.
No swift change is in sight as, “many storefronts will require extensive planning and substantial commitments” by retailers, REBNY noted.
“Upper Fifth is going through extensive re-imagining,” De Coster told The Post. “Some vacancies are tied to consolidations in luxury retail.”
He noted that despite sluggish leasing, several marquee brands such as LVMH and Gucci have bought their properties, signifying long-term commitment. Meanwhile, Rolex will soon launch a spectacular new store in its nearly-finished new headquarters tower at 665 Fifth Ave.
Times Square, which has acres of fast-casual food but has yet to see much actual store leasing, “is in transition. It’s still working out its identity,” DeCoster said.
Herald Square had 25 dark storefronts, more than in any other area covered in the report. Average asking rent fell by 14% from $447 to $383 — the lowest in the last 10 years.
But the busy shopping mecca anchored by Macy’s got a lift with the new, 40,000-square-foot lease for TJ Maxx at Herald Towers we reported last week — too late to be included in the report.
Among the survey’s other findings:
- Fitness/wellness tenants signed some of last year’s largest “retail” leases, due in part to the discontinuation of the city’s special-permit requirement for such uses as gyms, martial arts studios and licensed massage clinics. It opened the door to large-scale leasing by Equinox, Life Time and others.
- Tightened availability in leading downtown neighborhoods pushed smaller retailers into Noho, Nolita, Union Square and the Madison Square Park areas, while those needing larger footprints turned to Chelsea, Hudson Square and Tribeca.
- Available spaces move swiftly in Soho, where Abercrombie & Fitch took the former Lululemon space at 520 Broadway, and on upper Madison, where Jacob Cohen leased the former Michael Kors location at 792 Madison.
- Restaurants remain a market driver, such as steakhouse STK’s lease for 12,000 square feet for its fourth Manhattan location at 412 W. 15th St.
