No business district in Manhattan would have been more affected by the financial havoc caused by the pandemic.
In the chic neighborhood of Soho, more than 40 stores have closed during the pandemic. More than a quarter of the offices, which were once the most desirable and expensive in New York City, are vacant, the highest vacancy rate in Manhattan. International tourists fueling the region’s economy disappeared a year and a half ago.
Perhaps no neighborhood in the American city has been hit hardest by the financial devastation of the pandemic, more hurt than the picturesque district of ornate cast-iron buildings, art galleries and designer boutiques that made it one of the country’s hippie neighborhoods. Is.
As New York emerges from the depths of economic free-fall, it has hit some major milestones recently. In-person classes have resumed in city schools, Broadway theaters have reopened and 300,000 municipal workers have returned to their offices for the first time in 18 months.
But on Soho’s cobblestone streets, the economic scars have yet to heal, a sign of how vulnerable New York is to an infectious disease that has exposed an urban economy built on face-to-face interactions in offices, restaurants and shops. has done.
The sidewalks are bare. “For Lease” signs hang in storefronts one after another. Most boutiques outnumber shoppers, and many stores have reduced their hours, in some cases opening until noon and closing before the pandemic. neighboring 8,000 residents cannot compensate for the loss of tourists.
“The pandemic has hit us hard,” said Connie Gharibian, director of finance Hudson Furniture, a high-end furniture designer who decided not to renew the lease on her Wooster Street showroom in March 2020 after people moved into the house. “The traffic there wasn’t enough to keep us going.”
A few years ago, Soho was one of the hottest retail districts in the world, filled with luxury brands like Chanel, Gucci, Louis Vuitton and Ralph Lauren that paid the highest rents in the country. According to one, shoppers spent $3.1 billion in 2016 in Soho and neighboring NoHo HR&A Advisors Report, second only to Fifth Avenue in Midtown Manhattan in total retail revenue.
Tourists thronged Broadway’s overflowing sidewalks and swarmed in and out of stores such as Dean & Deluca, Nike and Uniqlo. Social media influencers thronged the narrow streets, snapping photos to post on Instagram. Shoppers lined up outside stores on Friday morning, eager to buy items on sale.
Almost overnight, shoppers, especially those from overseas, evaporated, proving how much stores depended on them.
“Without tourists, it’s dead here,” said Carlos Garcia, manager of Mystic Boutique, a locally-owned clothing store on Broadway, which now closes two hours ago at 7 p.m.
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Travel restrictions will be eased for international visitors starting in November, but city officials say it could take until 2025 for foreign tourism to return to previous levels.
Given the steady decline of brick-and-mortal retail, Soho was facing challenges even before the pandemic. But the problems have worsened amid the slowdown caused by the pandemic, coupled with the explosion in online shopping.
Vornado Realty Trust, one of the largest real estate companies in New York, Recently sold two properties in Soho, along with several on Madison Avenue, at a loss of $7 million. Only a third of the buildings’ storefronts were occupied, the company said.
Still, property owners and neighborhood business leaders say there is reason for optimism. There has been an increase in foot traffic in recent months, as has the number of subway riders at Soho stations. New retailers are moving in, including sporting goods brand Wilson’s first flagship store, and some start-ups are leasing office space, albeit often for far less money.
“Retail rentals had gotten too high,” said Jeffrey Gural, president of GFP Real Estate, which owns several SoHo buildings. “In some cases, they were replacing marketing, knowing they were not going to be profitable stores. Those days are over.”
Before the neighborhood’s current woes, many residents and business owners were locked in a bitter dispute with the city over a proposed rezoning that would allow 3,200 new apartments, including hundreds of market-rate units. The proposal has sparked common concerns in Soho for decades, that any changes would disrupt the character of the area that young artists put on the map half a century ago.
Reasoning, which was Proposed by Mayor Bill de Blasio And the city has been under review for months, with the city council facing an uncertain outcome. Several members have said they oppose it and have called for the amendment, raising doubts that it will get a vote before Mr. de Blasio’s term ends in December.
Eric Adams, the Democratic mayoral candidate in New York City, has voiced his support for using rezoning to address the city’s affordable housing challenges, including wealthy neighborhoods in Manhattan. “We need to see holy cows like Soho,” Mr. Adams said in a recent interview on “The Ezra Klein Show,” a podcast produced by.
Mr Gural said he supports rezoning because the influx of new residents can help save the retail district. “People living in Soho have to suck it up and recognize that the city has changed and the artists have moved out,” he said.
No other neighborhood in Manhattan has seen its offices empty faster since the pandemic began. According to real estate company Sevilles, about 25 percent of the space available for lease is almost triple the vacancy rate before the pandemic. Many companies have given up on their spaces as they decided to make remote working a permanent feature even after the pandemic eases.
Like many businesses that chose to locate in Soho, online retailer Boxed was framed by bustling streets, open lofts, and industrial architecture. Company employees returned to office for the first time in September, although this was not mandatory.
“It’s a great shame because just before the pandemic, it was a lively neighborhood,” said Chieh Huang, the company’s chief executive officer. “It was a really wonderful time, and it’s really come in the opposite direction.”
Mr Huang said Boxing was committed to Soho but also adapted to hybrid work and had begun hiring employees who live elsewhere and can work full-time remotely.
“I don’t see a world within the next five years where we’re back in the office five days a week,” he said.
New York has some of the most iconic and recognizable retail strips anywhere. Fifth Avenue has long attracted the world’s biggest brands, and Madison Avenue has become a prime destination for luxury retailers. The pandemic has ravaged both the corridors.
For years, the largest retailers neglected Soho. It was a gritty area, home to factories in the early 20th century and then, in the 1960s, a refuge for artists of all stripes, drawn by its cavernous lofts and cheap rent. Tourists were caught, wandering the galleries and marveling at the buildings’ industrial columns, pressed tin ceilings and bare brick walls.
European designers discovered the neighborhood in the 1990s, beginning a decade-long migration downtown for high-end retailers that transformed the neighborhood into a global shopping mecca. By the early 2000s, Soho, along with most mom-and-pop stores, had become unaffordable to residents without millions of dollars.
The retail peak probably came in February 2014, when Prada renewed its lease on its 10,000-square-foot stores in Broadway and Prince Street for $1,000 per square foot. It was the first retail lease south of Midtown to reach that figure.
Prices have dropped since then. According to real estate services firm Cushman & Wakefield, the current asking price for a SoHo storefront is $274 per square foot, down from $350 just before the pandemic.
According to the latest available data, about 27 percent of neighborhood retail space was available at the end of July; The figure stood at 23 per cent at the start of last year, the firm said. Brands such as Victoria’s Secret, Fry’s and Missoni have closed their stores.
By the time Prada and Louis Vuitton arrived in the late ’90s – Prada with three stores by 1999 – Doug Cohen had been operating several boutiques in the area over the years.
They eventually had 14 stores in Soho, when rent was relatively cheap. One, between Grand and Canal Streets, cost them $5,000 a month, he said, before reaching $40,000 a month in recent years. They closed shop during the pandemic.
“The big guys come, and we can’t compete with them,” he said. “It’s still a …