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. Availability rate refers to the percentage of total rentable space available for lease or soon to be open.
Annualized average rents in these prime corridors increased 6.7% to $584 per square foot in 2025 from a year earlier, according to JLL. Ofthe 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.”