Hundreds of Local Storefronts Remain Rented to Corporate Brands, While Small Businesses Struggle, and Landlords Warehouse Empty Space
A new report from the Center for an Urban Future (CUF), a public policy think tank that uses data-driven research to bring attention to overlooked issues, documents that the proliferation of chain stores in Lower Manhattan has increased slightly during the past 12 months, while the same tally for the City as whole ticked upward by a similar (but somewhat smaller) accretion.
The CUF report, “State of the Chains, 2022,” defines chain stores (or “national retailers”) as businesses that have “at least two locations in New York City and at least one location outside the City limits.” This analysis documents that there were 293 such stores in Lower Manhattan at the end of 2022, an incremental gain from the total of 282 at the close of 2021. Both of these measures pale, however, alongside the same figure for the year 2019, prior to the onset of the COVID pandemic, when there were 351 chain stores Downtown. The drop from the pre-pandemic metric to current levels represents a decline of 17 percent.
During the same period of comparison (2022 versus 2021), the tally of chain stores in Manhattan overall grew by 0.1 percent, and for the City as a whole by 0.3 percent. (Indeed, the total gain of 11 chain stores in Lower Manhattan is greater than the net gain of just three for Manhattan as a whole.)
For small businesses, the outlook appears to be bleaker. A separate analysis from the Downtown Alliance indicates that a combined total of 224 Lower Manhattan small businesses shut their doors in 2020 and 2021, while approximately 100 new ones started up during the same period.
A third report, “The State of Storefronts, 2022,” from the Association for Neighborhood and Housing Development (ANHD), an umbrella organization of 100 non-profit affordable housing and economic development groups that serve low- and moderate-income residents in all five boroughs of the City, notes that more than 15 percent of all storefronts in Lower Manhattan were vacant at the close of 2020 (the most recent year for which complete figures are available). This tally (which was the second-highest for any district in the five boroughs) had jumped by more than half, compared to ANHD’s analysis for Lower Manhattan storefronts in 2019, when the retail vacancy rate stood at 9.9 percent. During the same period, ANHD notes, monthly retail asking rents in Lower Manhattan dropped by 11.1 percent, to $8.00 per square foot.
ANHD views the warehousing of empty storefronts by landlords as a form of real speculation that contributes significantly to gentrification and displacement, with knock-on effects that reduce the supply of affordable housing. For this reason, the organization waged a years-long campaign to enact a lawn (ratified in 2019) requiring the City’s Department of Finance to compile a detailed registry on storefronts, vacancies, rents, and lease terms.