Some 1.2 million square feet of newly minted retail space are coming to the Manhattan leasing market at three major new developments — Hudson Yards, Manhattan West and Essex Crossing — even as vacant stores blight almost every part of Manhattan.
Yet many retail landlords and brokers had a “What, Me Worry?” reaction to our Sunday column that forecast a ghost-town future for many streets and avenues.
Although most of the new product is spoken for, like Neiman Marcus’ 250,000-square-foot department store at Related Companies’ Hudson Yards, it’s far from fully committed. Westfield America still has unleased space on its hands at the World Trade Center more than two years since its Oculus mall opened.
The mega-projects put pressure on landlords struggling to find tenants for tens of thousands of square feet at newly created, high-priced storefronts at their own free-standing office, apartment and hotel buildings. Harry Macklowe’s super-tall 432 Park Ave. has found only one retail tenant in several years of trying: Swiss watchmaker Richard Mille, which took under 5,000 square feet of about 60,000 available.
Colliers International’s Brad Mendelson said bluntly, “All these new developments are not affordable. They were planned [a few years ago] in an environment that was growing 10 to 15 percent a year.”
When users finally sign on for the new projects, they tend to be pharmacies — and enough bank branches in a single neighborhood to serve the whole of Manhattan.
Meanwhile, long stretches of older properties remain dark at sidewalk level, including on Third Avenue north of Bloomingdale’s, Broadway north of Lincoln Center, numerous Bleecker Street blocks, West 14th Street in the Meatpacking District, and all over the Financial District.
Among the few with a balanced view was developer Douglas Durst, who spoke to The Post about the situation before the column ran. He noted, “I’ve been around for a while. We saw large vacancies in the 1970s and early 1980s. But it’s unusual to have today’s real estate retail recession at a time when the economy is taking off.”
Durst said the situation, which he declined to call a “crisis,” doesn’t need city interference. He said, “Developers are not going to build more space than they think they can lease. I think that’s going to happen naturally without any regulation.” The problem is that too much space has been launched in projects that were set in motion long before the dimensions of the retail fallout became clear.
Durst hasn’t had much trouble renting out storefronts at his company’s properties — he leased 46,500 square feet to Nordstrom Rack for the whole blockfront at…