Manhattan’s retail availability rate, driven by demand in neighborhoods such as SoHo and upper Madison Avenue, has hit a new record low.
The availability rate across major Manhattan shopping corridors, which also include Fifth Avenue, Times Square, the Meatpacking District, Union Square and Herald Square, dropped to a historic low of 13.7% in the fourth quarter, the lowest quarterly rate on record since the third quarter of 2017, JLL said in a study.
The average annual prime availability rate, after having risen to a peak of 28% during the pandemic in 2021, sank to 14% in 2025. That was also lower than the 21% rate pre-pandemic in 2019, JLL found. The real estate firm bases its rate on a count of available spaces to lease.
Annualized average rents in these prime corridors increased 6.7% to $584 per square foot in 2025 from a year earlier, according to JLL. The retail recovery is mixed, just as Manhattan’s office rebound also has been uneven and driven by demand for top-tier space.
Among the outperformers, in SoHo, the availability rate in the fourth quarter dropped to a record low of 9.8%, driving the average asking rent in the cluster up more than 25% to $355. The Madison Avenue stretch between 57th and 72nd streets saw its average asking rent rise to $982 per square foot, the highest level since the third quarter of 2019, as its availability rate last quarter dropped to 7%.
On the other hand, the 34th Street and Herald Square shopping corridor remained a big laggard despite increased holiday shopping traffic in December to the Macy’s flagship Herald Square store. The fourth-quarter availability rate in the corridor is approaching 40% while the asking rent on average has slumped 20% to $421 per square foot from a year earlier, in contrast with rents at well above $600 in 2019, according to the JLL study.
In the tourist-and-entertainment hub of Times Square, although the area projected its highest tourist numbers since 2019 last year, average asking rents fell about 37% annually to $960 per square foot in the fourth quarter, with availability nearing 22%, according to JLL.
“Prime New York retail fundamentals remain exceptionally strong, driven by sustained demand and a chronic lack of quality supply,” said Patrick Smith, vice chairman of JLL’s retail brokerage, in an emailed statement to CoStar News. “In core corridors, well-located space is leasing quickly, pricing is resilient and decision-making has become far more strategic as tenants compete for fewer opportunities. … We expect this supply-demand imbalance to persist into 2026, particularly in top-tier submarkets where new inventory is limited.”
A separate report from CBRE released Monday also found the number of direct ground-floor availabilities across Manhattan’s 16 premier shopping corridors had dropped 11% to 173 spaces in the fourth quarter. The document added that the current count of available spaces is now 40% below the peak of 290 spaces recorded in the second quarter of 2021, “marking a significant improvement from the market’s lowest point.”