The retail landscape along Third Avenue in Manhattan is experiencing a significant revival, with vacancy rates dropping sharply. Reports indicate that availability has declined from a peak of 25.9% between 59th and 79th streets at the end of 2020 to just 8.4% today. This positive trend is encouraging for both Upper East Side residents and commercial leasing prospects in the area.
According to Steven Soutendijk from Cushman & Wakefield, the reduction in available retail space is noteworthy. He stated, “That is very low, and almost all of that available space is around Bloomingdale’s, like the Home Depot space.” Current asking rents on Third Avenue range from $150 to $400 per square foot, with an average asking price of $246 per square foot.
Third Avenue’s Economic Indicator
While Third Avenue does not carry the same prestige as neighboring Madison Avenue, its retail health serves as an important indicator of the economic stability in one of Manhattan’s key middle-class neighborhoods. James Famularo from Meridian emphasized this point, noting, “Its consistency and strong demographic base continue to attract high-quality tenants.”
In recent years, Third Avenue has seen a shift in retail types. Previously dominated by sportswear shops, the corridor has welcomed a variety of “wellness” tenants and even walk-in pet clinics. Despite these changes, a resurgence of traditional retail is evident, with new leases being signed by businesses that sell tangible products. The upcoming arrival of Brandy Melville at 1172 Third Avenue is one such example. This location, previously occupied by CVS and various pop-ups, is set to enhance the retail offering.
New Arrivals and Ongoing Challenges
Several other notable establishments are either opening or have recently opened along the corridor. Blinds to Go has taken over half of the retail space at 1011 Third Avenue, while Whole Foods Daily Shop has begun operating in what was once a Food Emporium. Additionally, a new outpost of the popular Italian trattoria Felice is set to replace a diner-cafe in Trump Plaza at East 64th Street.
Despite this positive momentum, some high-profile locations remain unoccupied. The retail corner at 200 E. 59th Street, developed by Harry Macklowe, and the former Ikea Studio at 999 Third Avenue are still seeking tenants. However, Soutendijk pointed out that smaller spaces in the high sixties and seventies are leasing quickly, indicating a diverse mix of traditional apparel, grocery, restaurant, and service businesses is thriving.
The revitalization of Third Avenue not only reflects changing retail dynamics but also suggests growing confidence in the commercial viability of Manhattan’s Upper East Side. As demand for retail space continues to rise, the area is poised for further growth in the coming months.