Last August, I counted 100 available retail spaces in Tribeca. This year, there are 129.*
This is sure to inspire comments about “greedy landlords,” but the landlords lose money every month their storefronts remain vacant. Asking rents are clearly too high—landlords think their storefronts are worth more than they are—but as one broker I spoke with pointed out, there’s just enough activity to keep hope alive: “Landlord #1 hears that landlord #2 was able to get $150 per square foot, so he wants to wait, even though his space is worth more like $80.” There are likely other factors at work. As another broker explained, a lot of landlords get financing with high expected rents as part of the equation. No one wants to admit he or she overpaid, and it’s not in a landlord’s interest to only make enough rental income to pay the bank—so, in a twist on a banking term, better to extend and pretend.
There has been talk of a softening in the retail market elsewhere in the city, but we’re not seeing it yet. What I wrote last year still feels applicable—and only more so as FiDi turns into a massive mall: “Even if Tribeca continues to get aggressively developed, it will never be a high-density neighborhood when developers keep building 4,000-square-foot, single-family apartments. And the lack of corresponding foot traffic is what caps the amount of money any business can make here. You could argue that workers from FiDi will help fill the void, but there’s an obscene amount of retail coming online to the south—at Brookfield Place, the World Trade Center, the Seaport District, the Fulton Center, 28 Liberty…. That’s also where chains are going to want to be, because tourists are there, too. Tribeca then gets left to the independent businesses. Of which there are fewer and fewer….”
*The methodology is the same as last year. The area surveyed is bounded by Canal, Broadway, Murray, and West. I did not include the spaces where we know something is coming; new or not-yet-built buildings where the amount of retail is unknown; pop-ups and other temporary retail (such as condo sales offices); or anything on Canal, because that’s an entirely different ecosystem from the rest of Tribeca—although it too is decimated, especially the north side.
UPDATE 8/24: The good news is that there are only 127 now, first because Pixel Academy is moving into 256 West, and 8 Jay is very much still the home of Artflag. (I erroneously assumed it was still on the market.)