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Market Report

New York Retail Investment Forecast

2022 Outlook

Retail Properties Benefit from Returning Foot Traffic;
Mixed-Use Provides Hedge Against Uncertainty

Outer boroughs near recovery, with commercial districts well on the way. Amid questions over economic reopening, retail recovery continues across the five boroughs. Despite the emergence of COVID-19 variants, gaps between current foot traffic and pre-pandemic activity have consistently narrowed, and consumer spending will end this year over 20 percent above 2019 levels. Asking rents in the city's outer boroughs are approaching full recovery, with Queens and Staten Island reporting all-time highs for single-tenant assets in 2021. As most office workers remain on remote schedules, subdued commuter traffic leaves retail fundamentals in core Manhattan and Brooklyn submarkets further from pre-pandemic peaks. Despite this, robust leasing activity in January of this year is generating record-asking rents for office space in Midtown South, signaling tenant confidence in a large-scale return to workplaces in the near to mid-term. As large firms commit to bring employees back to Manhattan and Brooklyn, rising commuter activity will put significant positive momentum on retail asking rents in these office-heavy districts.
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