New York City shows signs of retail recovery despite empty offices – WWD
Despite a recent survey that quantified the continuing shortage of office workers in New York City, some executives in the Business Improvement District reported increased foot traffic, improved retail sales and optimism for the coming months.
On Wednesday, the New York City Partnership released a survey of 188 large companies that found only 28% of Manhattan office workers returned to their desks. Additionally, office vacancy rates are at a 30-year high of 18.6%, and by January, only 13% of office workers are expected to be back in their Manhattan offices five days a week.
This week alone, unionized workers in Hearst were reluctant to return to the office once a week soon. As they and others struggle for more flexible hours, the city’s ecosystem is feeling its absence not only in sales of quick and casual lunches, but also in property tax revenues. Forty-nine percent of office workers are expected to return on average during the work week by January, according to the new survey.
Despite these discouraging figures, IDB leaders presented a more optimistic outlook on Thursday.
Dan Biederman, chairman of the 34th Street Partnership and executive director of Bryant Park, expects turnstile numbers to hit 80% just after the New Year. Small buildings are already at 80% and large buildings at 40%, he said, adding that TJX had just brought workers back to its office building at 5 Bryant Park, where the retailer occupies a few floors.
Part of their confidence comes from observational clues, such as the increased influx of people between 7 and 8 a.m. at 9 West 57th Street, home to “large legal and financial firms,” ââaccording to Biederman, who lives off. across the street. People are better dressed than a year ago, and many are wearing suits again, he said. Neither Mayor Bill de Blasio nor Mayor-elect Eric Adams may have to do anything to encourage a return to office, he said. âIt seems to be coming back. People got tired of the WFH.
Dan Pisark, vice president of retail services and special projects at 34th Street Partnership, said Penn Station is busier with travelers on Long Island Railroad and New Jersey Transit, as well as Amtrak to some extent. Subway stations near 34th Street are increasingly crowded. More and more people are walking around with shopping bags, especially at Macy’s and H&M, he said. Emphasizing that coronavirus cases have declined significantly, vaccination rates are significant, wearing masks is prevalent outdoors and foreign travelers vaccinated may return, Biederman and Pisark are “positive” about continued improvement.
Madison Avenue has seen a wave of store openings and expansion in existing stores of late.
Stretching from 57th Street to 86th Street, Madison Avenue BID has the advantage of sitting in a predominantly residential area instead of relying on office workers, said executive director Matt Bauer. Art House, a fine arts hub, will take over the former Barneys New York space on Madison Avenue. AG Jeans and Studs, Sleepy Jones and Christophe have opened new stores; Bogner unveiled an outpost and Brunello Cucinelli recently expanded. Giorgio Armani is in a temporary space as he is renovating another building. HermÃ¨s is building a new flagship at 702 Madison Avenue.
William Greenberg Desserts was expanding into what was once the Alexis Bittar store. The latter moved to another location on Madison Avenue. Bauer noted that a few pop-ups have become permanent stores such as Mackage’s LTDxNYC and Lizzie Tisch. Seaman Schepps will open a new store. With a current vacancy rate of 16%, that figure was around 19% a year ago.
Encouraged by the return of international travelers, Bauer expects there will be “some kind of shock” over the holidays, but that more people will visit the city next spring. Corinthia Hotels will also open their first US location in what was once Surrey in 2023.
Noting how the New York Social Diary increasingly covers events and galas, Bauer said the return of such events is a sign that things are returning to normal.
âNot only are there many events taking place in the community here, but they are also aimed at charities that are often based here,â he said. âPlanning for these events often takes place in restaurants and hotels here. And people buy clothes to wear [to the galas on Madison Avenue stores]. “
The return to in-person learning in public and private schools has also brought families back to the neighborhood, he added.
With a few hundred stores, the Hudson Yards / Hell’s Kitchen Alliance lost just one retailer – Neiman Marcus – during the pandemic, group chairman Robert J. Benfatto said. âWe did better than I expected. Most of the places remained. Any restaurant I’ve lost, a new one has opened or one is in the works.
Restaurants remain the strongest sector due to the number of tourists to the area and the return of some office workers, he said. âThe traffic is worse than it has ever been,â Benfatto said, adding that many hybrid workers are more likely to drive for their two days of work in the office each week.
Two new office buildings are slated to open next summer with one that will have Facebook, or Meta, and Blackstone as key tenants, and the other will have Pfizer as its primary occupant. Meta and Pfizer signed before the pandemic. Together, the buildings have approximately 1 million square feet of space. One is almost fully leased and the other is about 60% leased, Benfatto said. This should bode well for retailers in the region and will translate into thousands of additional workers in the region, he added.
At NoHo, foot traffic improves during the day and increases as the week progresses, according to Cordelia Persen, executive director of NoHo BID. Unlike Midtown, where many office towers remain largely vacant, some NoHo workers have returned to their offices, which tend to be smaller with high ceilings and opening windows. The responsibility of bringing down five employees for thousands is very different, she noted. In turn, restaurants in the area have started serving lunch again, Persen said.
âWe mostly have a lot of small businesses. When I get in the elevator of my 12 story building, we now stop at four floors. The elevator is full again. Maybe not 100% like before. she said.
Despite this, one of the major local tenants, Meta, has not brought its employees back from NoHo, and neither has Snap. âIn addition, the technology [companies] feed their employees in the office so they don’t have a food footprint on our neighborhood, âsaid Persen. She worried about the impact of the lack of workers on lunchtime restaurants, but noted that several restaurants in the area have recently reopened for lunch.
Sneaker retailers Laced Up and Sneaker City each opened their first stores in Manhattan. Apparently “very successful”, they “add a lot of life to Broadway”, according to Persen. Another direct-to-consumer brand, Lalo, which specializes in raised items for children and babies, has just opened a 4,700-square-foot Bond Street flagship store that also houses a cafe.
âMondays and Tuesdays are very slow. It is built until the weekend. It gets much stronger. The streets are much busier after 1 p.m. Stores tell us their numbers are on the rise again. It’s just a different buying model, âsaid Persen, adding that Hatch and Ulla Johnson have had strong sales.
Anticipating a busy holiday shopping season, Showfields, a three-story location that provides digital-native brands with brick-and-mortar outposts, is setting up gift-wrapping tables to encourage shoppers to buy. lots of little gifts “for anyone you’ve ever cared about in the new post-Covid happiness,” Persen said. “They predict people will want to buy more Christmas presents. They [feel] that there is more wealth, more anticipation and that people spend more. Other people have told me the same thing.
The NoHo BID has around 140 spaces on the ground floor, with fashion accounting for around 35%. The executive director said she noticed an increase in traffic in September, although concerns were mounting over the Delta variant. The children returned to the classrooms and the traffic on the streets became more dynamic as a result. Construction resumes and âFor Rentâ signs are showing down in the area. The return of New York University students has also helped staff at some local businesses.
âI hear high-end brands saying foot traffic is coming back,â she said.
Flatiron / 23rd Street Partnership executive director James Mettham said Gap will return to Lower Fifth Avenue with the opening of a store. Harry Potter New York has opened in the neighborhood. The current BID has more than 500 companies on the ground floor, but that will increase to 700 or 800 as the expanded limits go into effect next year. The area’s current vacancy rate varies from block to block, with some having 10% vacancies and others 15-20%, especially those closer to Union Square.
Overall, foot traffic in the area has improved month over month. There is around 75% of foot traffic in 2019, which is “really promising,” Mettham said. Still impacted by the drop in the number of international travelers, the IDB leader was enthusiastic that there had been many purchases by national and regional tourists. And the recent easing of travel restrictions in the United States is “really great,” he said.
Looking ahead to the next few months, winter is generally a bit more difficult for retail compared to the holiday season, which makes businesses in the area feel really good, Mettham said. But rolling out boosters and vaccines for children could help bring back more office workers, he added. In response to the Delta variant, some area offices are considering a return in early 2022 and / or hybrid.
As Adams assumes his new role, Mettham said, âHe understands the importance of what central business districts and the community at large mean to New York City’s economy and the quality of life for residents. people in every corner – whether in Midtown, Midtown South or any borough or main streets. We look forward to working with his administration. He announced his transition the other day. He has a great perspective on all kinds of facets that move the city.