Foot traffic recovery provides boost to urban retail corridors

Increased foot traffic contributes to slew of new leases in NYC’s tourist-heavy Plaza District

I’m here to report some great news: it’s (finally) summer! More than two years since the onset of the pandemic, people are now comfortable eating out and hitting the streets; things are finally beginning to feel somewhat “normal” again.

While still trailing suburban malls, where foot traffic has completely recovered, foot traffic to prime urban retail corridors across the country is now within 25% of pre-pandemic levels, a major positive sign for retailers in these urban areas.

Urban & suburban foot traffic

These corridors are still contending with office occupancies hovering around 40% (Kastle) and massive decreases in tourism: the US Department of Commerce reported that international visitation dropped from 79.4 million visitors in 2019 to just 19.2 million in 2020, and inched up slightly to 22.1 million visitors in 2021.

Thankfully, the federal government recently announced that COVID-related travel testing would no longer be required to travel to the United States, a well-timed measure that will certainly bolster the tourism industry. Seeing that foot traffic has recovered this much already without international tourism indicates the potential for robust recovery in the summer months.

Versus UK

Clearly retailers have been keeping their ear to the streets and are aiming to capitalize on the pending return of tourism and foot traffic by leasing available space in areas of cities that will benefit the most. In New York City, we’re seeing this take place in the Plaza District, an area that relies heavily on office and tourist populations and remained stagnant through most of 2020 and 2021 as a result, but which has since bounced back to account for almost 10% of overall leasing activity in Q1 of this year.

Plaza District Leasing YTD 2022

Similar activity has been noted in prime retail corridors in other cities as well: Oak Street in Chicago and the Design District in Miami have been especially active. As relaxed restrictions encourage tourism and warmer weather brings people back outside, we can expect these heavily trafficked corridors to see sustained activity in the coming months.