Manhattan's Retail Renaissance: Newcomers Flock To The Big Apple Post-Pandemic

After the COVID-19 pandemic subsided, an array of retailers opened shop for the first time in Manhattan, the bustling heart of New York City, to take advantage of the return of international tourism and consumer demand for luxury and leisure.

Retailers were drawn to New York because of the abundant supply of vacant storefronts, generous concessions, flexible lease terms and percentage-rent lease structures.

Retailers opening their first shops in Manhattan signed more than 1.56 million square feet of new deals between 2020 and 2023, according to a report from CBRE. That's about 15% of the total leasing volume during the three-year period.

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In 2023, newcomers made significant commitments, securing more than 455,000 square feet, equivalent to 18% of Manhattan's annual leasing volume. They also represented nearly 30% of the total square footage leased by all new entrants over the preceding three years.

Notable Tenants New To Manhattan

Source: CBRE Research

SoHo was the most sought-after Manhattan neighborhood for retailers looking to open their first brick-and-mortar store, with more than 281,000 square feet leased in 71 deals. SoHo is attractive for retailers that want to position their brands among young, fashionable consumers who want to experience the neighborhood's cachet of luxury and international brands.

Northern Irish furniture retailer Orior signed a lease for a 21,000-square-foot showroom in SoHo, and Israeli couture fashion brand Galia Lahav agreed to an 8,200-square-foot lease. Other retailers opening up shop in the neighborhood include Swedish apparel brand TOTEME and San Francisco-based mattress brand Thuma.

Food and beverage operators opening restaurants in New York for the first time accounted for the highest amount of activity between 2020 and 2023, signing leases for more than 315,000 square feet of space in 70 transactions. Michelin-starred Taiwanese restaurant Din Tai Fung plans to open its first New York location in the Plaza District, and English entrepreneur Robin Birley is opening a 13,000-square-foot 5 Herford Street dining club.

The influx of new retailers has reduced the supply of prime spaces in the city's most popular neighborhoods, and the diminishing supply of space is driving prices up, forcing tenants to explore the "next best" locations in secondary markets.

As more workers return to the office and tourism continues to pick up, New York City remains the prime location for retailers that want to test their brand on the world's biggest stage.

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