For Immediate Release
August 8, 2019
Rachaele Raynoff, Joe Marvilli – email@example.com (212) 720-3471
DCP Issues Storefront Vacancy Report
In-depth report looks at trends in retail and storefront uses in 24 neighborhoods across the five boroughs
NEW YORK – Department of City Planning (DCP) Director Marisa Lago today announced the release of “Assessing Storefront Vacancy in NYC,” a new report offering a detailed exploration of recent retail trends and storefront vacancies in New York City in the context of shifting technology, economic forces, and consumer preferences. The most data-driven, in-depth look at these issues to date, the study surveyed shopping corridors in 24 neighborhoods across the five boroughs
“In an ever-changing city where neighborhood shopping is an important facet of urban life, it’s crucial that we put as much reliable data as possible into the hands of business owners, residents, policy makers and elected officials. DCP’s research shows that the reasons for storefront vacancies are complex and varied and that solutions must be nuanced and targeted – or we may do more harm than good. And, encouragingly, our research also reveals that many community shopping districts are thriving,” said DCP Director Marisa Lago.
Across the 24 study areas, DCP analyzed 10,000 storefronts using third-party data based on on-the-ground surveys. Looking at trends from late 2017 through Fall 2018, the study also used demographic, land use and real estate data, and input from local business associations.
The study focused on continuous, pedestrian-oriented shopping corridors, excluding shopping malls and auto-oriented strips. In eight neighborhoods, DCP was able to compare data from 2017/18 to data from surveys conducted by DCP in 2008/9. While the average vacancy rate across these neighborhoods increased from 7.6% to 9.0%, it declined in three corridors.
DCP studied corridors in these 24 neighborhoods:
The report explores how the retail industry is changing, and found that both e-commerce spending andbrick-and-mortar spending are increasing nationwide. While many New Yorkers are increasingly purchasing dry goods online, restaurants, bars, local services like salons, and new models of retail (pop-ups, escape rooms, bookstore cafes, “omni-channel” providing online and in-store offerings) are growing in New York City.
While “Assessing Storefront Vacancy in NYC” identifies some neighborhoods with high storefront vacancies, vacancy does not appear to be a universal issue throughout the city. In the neighborhoods studied, vacancy rates ranged from 5.1% to 25.9%. A 5-10% vacancy rate is generally considered to be “healthy” by the industry, though rates can fluctuate over time.
During the time period studied, the neighborhoods with the lowest vacancy rates were Jackson Heights/Queens (5.1%), New Dorp/Staten Island (6.7%), Kingsbridge/Bronx (7.8%), Morris Park/Bronx (8.1%) and Laurelton/Queens (8.3%). These neighborhoods, generally in areas farther from Manhattan, appeared to benefit from solid customer bases and little market volatility. While many of the higher-end Manhattan shopping corridors studied have higher vacancy rates, the Union Square/Flatiron area stood out as a healthy, stable area with a 9.4% vacancy rate.
The study found that shopping corridors with moderate-to-high vacancy rates are shaped by very different causes. While high rents are often viewed as the reason for retail vacancies, the study found that many additional factors – such as local customer base, transit access, building types, active or planned construction, zoning regulations, and challenges of operating a small business – also influence vacancy rates.
For instance, the vacancy rates for SoHo/NoHo and Brownsville are relatively high at 13%, but for different reasons. In SoHo/NoHo, a rent bubble that encouraged owners to keep space offline, zoning restrictions on the range of permitted businesses, and a significant amount of retail space to fill on both the main avenues and the side streets, caused a spike in vacancy, at least in the short term. Along Pitkin Avenue in Brownsville, long-term challenging economics, a weaker retail market, a lack of anchor stores, and limited subway access have hurt the shopping corridor’s occupancy rate.
While in areas like SoHo, rising-rent expectations may have encouraged building owners to keep retail spaces empty for high-end stores, a bubble may have burst and asking rents have declined in recent years, suggesting that the neighborhood’s current relatively high vacancy levels may not be the new normal.
New York City’s shopping corridors are central to its vitality, and the City should continue to monitor trends, identify ways to support small business, and ensure that any policies created to shape storefront uses are adequately flexible to allow businesses to adapt easily in order to meet our neighborhoods’ diverse and changing conditions.