Gene Spiegelman, Cushman & Wakefield
Seven years after the worst recession this country has seen since the Great Depression, New York City is riding high again. Manhattan has emerged as a vital center for global retail activity where we continue to see dynamic growth — driven by its economic fundamentals, urban migration, and its cultural and lifestyle attractions.
Gone are the days when suburban expansion sounded the death knell for high street retail. Since 2010, in the near-aftermath of the economic collapse and for the first time in decades, urban cores are growing at a faster rate than their suburban counterparts. Eighty percent of Americans now live in urban areas, and retailers and property owners in New York City and around the world are scrambling to adapt.
Millennials represent 24 percent of the overall U.S. population and are leading this urban charge. They want to live close to work. They’re driven by technology — and they demand an omni-channel retail experience that integrates smartphone and tablet use with a personalized, service-oriented, in-store approach. And importantly, it’s estimated they will represent nearly 30 percent of U.S. retail spending — the total of which was $4.6 trillion this year — by 2020.
Manhattan also continues to benefit from a strong tourist economy. According to the MasterCard 2014 Global Destinations Cities Index, more than 11.8 million international tourists visit Manhattan annually, making New York City the top U.S. destination city for international overnight visitors. These tourists not only eat at our restaurants and enjoy our landmarks, but they also spend time and money at our city’s premier retail locations.
Finally, New York City has been a focal point of American job growth in the last decade, contributing to a per capita income in Manhattan that is more than 120 percent greater than the other six key urban cities: which include Los Angeles, San Francisco, Boston, Washington, Miami, and Chicago. This increased income translates into higher purchasing power and greatly informs retail demand across the region.
So what does this mean to retailers?
For starters, we can rest assured the city will remain preeminent for the foreseeable future. Continued attractiveness of the city makes Manhattan an even more attractive option for brands seeking to enter the New York market and stake a global brand position.
We’ll also almost certainly continue to see retailers — both big and small — clamor to develop creative strategies to reach millennial consumers. Millennials demand sleek, inviting physical spaces as well as a complementary digital media experience, and the retailers most adept at striking this balance will continue to see their market share increase alongside this burgeoning demographics’ purchasing power.
Our status as a global tourism driver means retailers from abroad will continue to seek out a presence in New York. They’ll create competition among newcomers and already-established brands for prime real estate in the city’s most coveted corridors.
That’s a big win for the city’s economy — and for the retailers who pride themselves upon innovation and have made New York a world-class destination.
— By Gene P. Spiegelman, Vice Chairman & Head of North America Retail Services, Cushman & Wakefield. This article originally appeared in the August/September 2015 issue of Northeast Real Estate Business magazine.