Vacancies rose across city but most dramatically in outer boroughs with suburban-style shopping malls
By guest author Kate King from Wall Street Journal
In a city where every square foot counts, more retail spaces are being left vacant as online shopping and rising rents pressure shopkeepers, an analysis by the city comptroller’s office found.
New York City’s retail vacancy rate increased from 4% in 2007 to 5.8% in 2017, the latest year for which data was available, according to a report released Wednesday by Comptroller Scott Stringer. The amount of vacant retail space in the city roughly doubled over the same period, with 11.8 million square feet left empty by 2017.
“People are shopping online,” Mr. Stringer said in an interview. “The stores that seem to be doing well are the stores that provide a service—doggy day care, a child-care space, a yoga studio—things that you can’t buy online.”
Vacancies rose across the city but most dramatically in outer boroughs with suburban-style shopping malls, Mr. Stringer’s office found. Staten Island, Queens and the Bronx had retail vacancy rates above the citywide average.
Personal services and dining establishments are filling up more retail space, according to the comptroller’s report. The number of personal-service spaces, such as hair and nail salons and dry cleaners, grew nearly 50 % between 2006 and 2017, while restaurants grew 65 %. Traditional retail, by contrast, increased 19 % over the same period.
On the Upper West Side, Kenneth Yoo said he considered closing when the lease on his greeting-card and party-good store, Paper House, came up for renewal last February.
“Our business is getting slow because of Amazon,” said Mr. Yoo, who said he renewed his lease after his landlord gave him a good deal. “The old independent stores like mine are almost gone.”
The comptroller’s audit found that many shop owners have had trouble finding a good deal on rent. Average retail rents rose 22% citywide, to $51 a square foot, between 2007 and 2017, the comptroller’s audit found. Average rents in high-end retail areas jumped the most, including in SoHo, where the average rent reached $126 a square foot in 2017 compared with $60 a decade earlier.
But Mr. Yoo’s landlord, Mike Laub, said he believes the rental landscape has changed since 2017. Mr. Laub said he cut his tenant a deal because he wasn’t able to rent the store for a higher price.
“Rents have decreased drastically in the past year and a half to two years,” Mr. Laub said.