Retail Vacancy Diverges along 34th Street’s East and West Corridors

The once bustling 34th Street Herald Square corridor between 5th and 7th Avenues has seen an uptick in retail vacancies over the past several years. Although average morning 34th Street foot-traffic between Broadway and 7th Avenue declined from 12,300 people in May 2015 to 7,500 people in May 2025 according to reported public city data collected by the city, and business at Macy’s iconic block long flagship was down last year, retail vacancy along the east section of 34th Street is currently higher compared to the west section. Online real estate platform Costar currently lists a total of 174,479 square feet of 34th Street retail space between 5th and 7th Avenue of which 109,811 square feet lies between 5th and 6th Avenues — home to the Empire State Building. In contrast, the section between 6th and 7th Avenues, which is anchored by Macy’s, has only 69,938 square feet of retail space listed. While both the east and west strips are flanked by major transportation hubs, the west also benefits from Madison Square Garden. Residual recovery from the pandemic and changing demographics were noted as contributing factors to the higher Herald Square retail vacancy in a recent news report by Crain’s New York, as well as the opening of Metropolitan Transportation Authority’s (MTA) Grand Central Madison extended access to the east for Long Island Rail Road commuters that used to exit at Penn Station. A decline of tourist volume in the area appears to be another factor, Crain’s article citing a 3% drop year-over-year of the volume of visitors at the Empire State Building’s observation deck in the 2nd quarter of 2025, after “experiencing an even larger drop of 12% in the preceding quarter.” However, some other reasons for higher retail leasing activity towards the west end of 34th Street are the efforts of Vornado Realty Trust, having recently completed a major redevelopment of both 1 Penn Plaza, 250 West 34th Street and 2 Penn Plaza, 392 Seventh Avenue, rebranded as PENN 1 and PENN 2 respectively, as well as the REIT’s major upgrade of the dining and retail area within Penn Station completed in 2024.

In addition, seamless access from Penn Station to the food hall and retail offerings at Moynihan Train Hall along with proximity to Hudson Yards has also contributed to a shift further west by consumers. Further boosting retail leasing activity in Penn District is an uptick in restaurant leases. An article by Bloomberg posted on Crain’s website in late September announced “an influx of new office tenants, plus straphangers and basketball fans” has attracted several notable restaurants after the launch of the Moynihan Train Hall and the opening of its food hall in 2021; and with the Penn District/Herald Square area offering lower rent opportunities than Hudson Yards and prime Midtown spaces, it has become an even more favorable opportunity. Looking ahead, the city has plans for a 1.1-mile 34th Street busway between 3rd and 9th Avenues, essentially eliminating passenger vehicles between 6 AM and 10 PM and making it safer for pedestrians, which could help boost foot traffic further east on 34th Street. However, the elimination of passenger cars has sparked mixed response from the area’s landlords and business owners, but recent developments have reportedly made the fate uncertain for the busway that was expected to take effect before the end of this year. While a boost in housing production as part of the city’s Midtown South Mixed-Use Plan that was passed in August could have added future benefit to the Herald Square corridor, 34th Street was not included. Despite some recent larger lease signings, such as Ireland-based Primark’s lease for 78,760 square feet at 150 West 34th Street, and the 55,000-square-foot lease by Gap Inc-owned Old Navy at Herald Towers, 50 West 34th Street, vacancies continue to remain high leading to several of the retail owners being faced with an influx of foreclosure lawsuits.

Source:    https://www.crainsnewyork.com/real-estate/west-34th-street-struggles-empty-stores-and-foreclosures

Source:    https://www.crainsnewyork.com/restaurants/penn-station-district-sees-influx-big-deal-restaurants