Forbes (originally in the NYT):
In the wake of a pandemic-crippled tourist season, and a sharp increase in businesses allowing employees to work from home, national retailers and restaurant chains are choosing to permanently close their Manhattan locations, according to the New York Times (Retail Chains Abandon Manhattan: ‘It’s Unsustainable’)
- Five months into the coronavirus pandemic national retail chains like J.C. Penney, the Gap, Victoria Secret and Kate Spade have shuttered branches, in some cases permanently, all over Manhattan.
- Many of the stores, especially in the heart of Manhattan, rely heavily on foot traffic, especially during tourist season, which peaks in the spring and summer.
- Before New York City was locked down in March, officials were expecting over 67 million tourists to over the course of the year.
- In the second week of July the occupancy rate for New York City hotels was 37%, down 90% from recent summers.
- Chain restaurants like Le Pain Quotidian, Subway and Chipotle have seen big losses—New York’s own Shake Shack reported a 40% decrease in revenue in the second quarter and many chain restaurants say they are more profitable in other states.
- Less than 10% of workers have returned to offices across Manhattan, devastating the lunch business for both chain and local restaurants, and many companies have said their employees can work from home until at least 2021.
The sudden lack of consumers has emptied the storefronts in New York City’s most vibrant shopping districts. Both chain and local retailers and restaurants are abandoning their outposts and flagship stores, often without paying their rent. Victoria’s Secret’s flagship store in Herald Square hasn’t paid its monthly $937,000 rent since its doors shut in April, according to the New York Times.
A Gap near Rockefeller Center hasn’t paid its rent $264,000 rent since it closed its doors. The loss of tenets has led commercial real estate rents to plummet. Average asking price along the 16 major retail corridors in Manhattan is currently around $688 per square foot, the first time the price has been below $700 per square foot since 2011.