Even as New York City has flourished in the past decade, vacancies in retail spaces have increased to nearly 6 percent, according to a new report from city Comptroller Scott Stringer, as reported by Crain’s. RETAIL VACANCY is, increasingly, the new OPENING SOON.
Greenwich Village/Soho, home to some of Manhattan’s most retail-intensive blocks, had one of the largest vacancy totals in the city – more than 265,000 square feet.
Using administrative data from property tax filings, Stringer’s office analyzed the five boroughs and found that while retail vacancies are extensive in Manhattan, rates are the highest in outer borough neighborhoods with large retail spaces such as malls. Staten Island and Queens have vacancy rates of almost 11 percent and 7 percent, respectively, while the Manhattan vacancy rate rose steadily from 3.3 percent in 2007 to 5.2 percent in 2017. In some neighborhoods, the rate is as high as 25 percent.
Responding to the abundance of vacant retail space, the city council passed a bill last summer requiring the Department of Finance to establish a database tracking vacancies across the city’s storefronts, including those in co-ops and condos. Meanwhile, pols have talked of imposing a vacancy tax and commercial rent control.
The report also found that, in addition to online retail, rising rents and regulatory hurdles have had an impact on retail vacancies. Retail rents rose by 22 percent on average citywide between 2007 and 2017, with the rate of growth much more rapid in some neighborhoods such as Soho, where average rents doubled over the time period.
The average number of days it takes to get a liquor license is also a significant driver of empty retail space, according to the report. In 2018, liquor license approval times increased citywide from roughly 50 days to about 75 days. Stringer’s report recommends improving city procedures allowing retail spaces to be more easily converted from one use to another, such as from a bank to a restaurant.
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