TSCG’s Michael Miller Offers Perspective on NYC’s Retail Vacancy Divide

New York City’s retail market can look very different depending on the block. While sought-after locations attract strong tenant demand, other storefronts remain empty – a contrast explored in a recent article from The Real Deal featuring TSCG’s Michael Miller.

Part of that disconnect comes from what retail market reports measure. Research focused on prime shopping corridors may show limited availability while overlooking vacancies on nearby streets. Neighborhood-level figures also reveal an uneven market: The Real Deal’s analysis of LiveXYZ data reported Manhattan retail vacancy at 13.2 percent, compared with 7 percent on the Upper West Side and 21 percent in the Financial District.

For Miller, the quality of available space helps explain the divide.

“Any B+ and up space is fully leased,” Miller told The Real Deal. “B and below you start getting into vacancies.”

Beyond empty storefronts, the conversation reflects a broader change in the character of neighborhood retail. Independent businesses face competition from national chains, well-funded operators and online shopping. Even when a storefront finds a new tenant, the loss of a familiar local business can leave residents feeling that something is missing.

“The little hardware store is now Home Depot,” Miller said. “The little pharmacy is now CVS.”

Proposals discussed in the article aim to support small and long-established businesses through measures such as lease-extension protections and grants for landlords renting to qualifying legacy tenants. Whether those approaches would preserve independent retail, or influence landlords’ tenant-selection decisions, remains an open question.

Meanwhile, businesses that depend on an in-person visit retain an advantage over online competitors. Miller pointed to personal services as a straightforward example.

“You can’t get your nails done by calling Amazon,” he said. “You have to go to a nail salon.”

The result is a retail landscape that requires a closer look than any single vacancy figure can provide. Location, space quality, tenant mix, and changing shopping habits all help explain why strong leasing demand and visible storefront vacancies can exist at the same time.

Source: The Real Deal.