H2 2025 Manhattan Retail Report: Broad-Based Demand in Many Corridors Sustains Retail Rally

Luxury retail, fitness and food-and-beverage driving activity

NEW YORK, NY – The Real Estate Board of New York (REBNY) today released its H2 2025 Manhattan Retail Report, which examines activity along major retail corridors in the borough from July through December 2025. The biannual study found that demand for storefronts in most corridors remained strong thanks to a mix of international luxury, expanding local retailers and new-to-market brands. Despite tightening availability across many corridors, asking rent averages are still well below their pre-pandemic peaks.

The average asking rent rose or was unchanged in six out of 16 corridors surveyed in this report compared to H1 2025. The highest jump in demand was Broadway in Soho with a 24% increase in median asking rent compared to the first half of the year. In this corridor, rent is only 12% below the all-time peak from 1H 2016.

Storefront availability is tightest in SoHo, Madison Avenue, the Flatiron District, Lower Fifth Avenue, and the West Village. At this time, two years ago, Madison Avenue had 35 storefronts available, and as of December that count had dropped to 13. Over the past two years, the corridor has welcomed more than 70 luxury apparel, accessories, flagships and boutiques.

Other corridors continue to register more sporadic activity, though. Four corridors (Times Square, Herald Square, the Financial District, and Upper Fifth Avenue) account for roughly 60% of all available storefronts tracked in the report, despite strong foot traffic and early signs of substantial momentum in Herald Square.

Across all 16 corridors in this report, the average rent is 32% below its peak level in the last 10 years, indicating room for further growth even with tightening conditions in prime locations.

“Despite challenges in the broader economy, Manhattan’s retail market continues to demonstrate a broad-based appeal,” said Keith DeCoster, Vice President of Market Data and Policy at REBNY. “Whether it is international direct-to-consumer brands entering the U.S. for the first time or local mainstays expanding their footprint, many are taking a focused, deliberate approach to choosing locations but then going all-in designing their stores.”

The full report and analysis, along with other studies on the New York City real estate market and industry by REBNY, can be found here.

"This report shows Manhattan retail isn't just recovering—it's evolving," said Jessica Walker, President CEO of the Manhattan Chamber of Commerce. "While the national economy cools, brands are making outsized bets on our corridors, investing heavily in design and hospitality because they see Manhattan as the proving ground for retail's future. The opportunity now is to ensure this momentum reaches every corridor. When retailers succeed across Manhattan, not just in the tightest markets, the entire borough benefits."

“While asking rents continue to trend upward in New York’s most in-demand retail corridors, they remain competitive relative to other global retail capitals,” said Joanne Podell, Executive Vice Chair at Cushman & Wakefield. “Brands continue to view New York City as the premier market to establish a retail presence, introduce new concepts, and strategically grow their businesses. The New York retail market remains as resilient and as strong as ever.”

"The retail market in Manhattan is "on fire," said Robin Abrams, Vice Chairman at Compass. “There was tremendous vacancy after the pandemic, with depressed rents and little absorption. In just a couple of years we have seen food uses, wellness and fitness uses, and finally fashion/apparel uses re-engage to lease space. High profile areas like Upper Madison and Soho now often have leases out above their asking rents with several back up offers. This is a relatively new dynamic, as both national and international brands jockey for their ideal space. Regardless of tariffs, economic shifts or other challenges, NYC 's dense local population as well as tourists are hungry for in person experiences. That might consist of eating an interesting meal in a unique spot, working off that meal in a boutique fitness class and then shopping to buy a new outfit to fit that gorgeous bod!"

“The retail landscape throughout the city is exhibiting stability and in many cases growth,” said Andrew Mandell, Vice Chairman and Principal at RIPCO Real Estate. “We are in a healthier environment today and I expect to see a continued increase in transactions going forward.”

“In the second half of the year, retail openings in Lower Manhattan far outpaced closings, a clear signal of the neighborhood’s momentum,” said Downtown Alliance President Jessica Lappin. “As our residential population continues to grow through conversions, there are new opportunities to meet the needs of an evolving local customer base. Last year Printemps's opened, this year we are welcoming the legendary food emporium Golden Mall, and we continue to see new kinds of health and fitness tenants like Socceroof popping up. It is interesting to see new innovative uses."

“The latest REBNY report reflects the continued momentum across Flatiron and NoMad, with ground-floor retail demand strengthening as vacancy continues to trend downward,” said James Mettham, President of the Flatiron NoMad Partnership. “With roughly 30,000 square feet of new fitness and wellness space coming online on Fifth Avenue, alongside a growing mix of food and beverage, the district is evolving in ways that support local businesses and reinforce the long-term vitality of the neighborhood.”

"From new fitness and experiential sports spaces to creative, design-driven, Hudson Square continued to experience strong leasing momentum in the second half of 2025," said Samara Karasyk, President & CEO of the Hudson Square Business Improvement District. “Through our efforts to enhance the streetscape and foster impactful public-private partnerships, the neighborhood has evolved into a vibrant retail destination. We look forward to welcoming more exciting tenants in 2026 and beyond as Hudson Square continues to grow.”

“Union Square's business improvement district finished 2025 with a formidable 91% storefront occupancy rate, underscoring that sustained demand for Manhattan’s most connected corridors remains high. We are experiencing renewed investment in the district as dozens of new businesses choose Union Square for its unrivaled transit connectivity and strong foot traffic, from high-concept food and beverage to immersive experiential storefronts. As Manhattan’s retail landscape tightens, Union Square remains a primary destination for brands that want to be at the intersection of local authenticity and global tourism,” said Julie Stein, Executive Director of Union Square Partnership.

"In Times Square our retail vacancy stands at 11% with increased total inventory and hundreds of new businesses opening last year with many more to come," said Tom Harris, President of the Times Square Alliance. "Compared to Manhattan's total vacancy of 15%, we believe that with hundreds of thousands of people a day walking through Times Square, we will be attractive to prospective retail tenants."

“In 2025, the Meatpacking District welcomed nearly 20 new tenants, led by strong demand across retail and home furnishings, bringing neighborhood occupancy to an historic high,” said Jeffrey LeFrancois, Executive Director of the Meatpacking District Management Association. “This momentum reflects years of strategic BID-led collaborations and economic development initiatives, including public art and seasonal programming, and major investments in broader public-realm improvements. Given the strong close to 2025, we expect this momentum to carry through 2026.”

Other Key Findings:

Retail demand remains broad-based: New leasing is led by international luxury brands, expanding New York–based retailers, and new-to-market concepts. Food & beverage, fitness and wellness, and fashion accounted for the majority of leasing activity during the second half of the year.

Fitness and wellness tenants executed some of the largest retail leases of 2025: Multiple gym and wellness transactions of approximately 50,000 square feet, highlighting continued growth in experiential and health-oriented retail formats. This growth has been supported by the elimination of the NYC Board of Standards and Appeals (BSA) special permit requirement, which has made it easier for these tenants to lease space.

Manhattan continues to outperform national retail trends: Supported by tourism, commuters, and higher-income households, New York City welcomed an estimated 64.7 million visitors in 2025, slightly exceeding 2024 levels and helping sustain retail demand.

Looking ahead to 2026: Brokers, owners, and retailers remain cautiously optimistic, expecting continued competition for space in top corridors and gradual spillover into adjacent neighborhoods as supply constraints persist.

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