A new report from JLL has posited that, while the recovery of urban retail real estate is still ongoing, it feels like urban markets are on a “steady upward trajectory toward normalcy.”
For urban retail to fully rebound, office workers need to come back on-site in higher numbers while tourists need to return to cities, JLL’s report stated. Regarding the first condition, office attendance isn’t back to pre-pandemic rates by any stretch, but many cities are seeing substantial growth in daytime workers. Office occupancy, which was at 18% this past January, has risen to nearly 40% nationwide. New York City has seen the largest spike of on-site office workers since January, with office occupancy at 18.1% during the week of Jan. 12 and at 37.4% during the week of April 27.
Meanwhile, tourism across the country is slowly but steadily on the uptick and should see more growth as summer gets closer. Key tourist-corridor destinations are so far seeing massive improvements this year compared to last. According to a JLL analysis of data from Placer.ai, foot traffic from domestic tourists in New York is up 14% from 2019 — good news for retailers in Times Square, which has seen foot traffic from January to April rocket by 186.2% year over year. On the West Coast, meanwhile, foot traffic in San Francisco remains below pre-pandemic levels of 2019, but year-to-date foot traffic to the city’s Union Square has jumped by 101.4% annually.
One factor boosting the urban-retail rebound has been the return of diners to restaurants. JLL noted that Americans’ comfort with dining out, according to Morning Consult, was at 75% at the end of April. That’s up 14 percentage points since the start of the year. The confidence in outdoor dining, especially as the weather warms up, is especially encouraging as this metric hit 82% — a new high — at the end of April.