NYC’s Third Avenue Evolves from Retail Center to Healthcare Corridor - The Jewish Voice
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Monday, September 26, 2022

NYC’s Third Avenue Evolves from Retail Center to Healthcare Corridor

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By: Ilana Siyance

Manhattan’s Third Avenue on the Upper East Side was once filled with prime retail space for sport apparel giants, like The Gap and American Apparel. With all the closures throughout the pandemic, however, the twenty-block stretch between 59th and 79th street has evolved.

As per a recent article in the NY Post, thanks to a push to fill the vacant spaces, the shops have been filled–but with scores of health and wellness offices.  There are doctors’ offices, dentists, veterinarians, and three different urgent-care medical facilities- including CityMD, MedRite and MyDoctor.  There are also more than a dozen diverse spas, skin care regiments and “wellness centers.” The healthcare offices used to take on upper floor spaces or basements, but with all the empty store fronts, they took the opportunity to move to ground level.  The mile long stretch of blocks now resembles a healthcare corridor.

The Third Avenue corridor is now filling up, and asking rents are back on the rise.  As per Cushman & Wakefield, asking rents between 59th and 79th streets on 3rd Ave are at about $221 per square foot for the fourth quarter of 2021, up from $206 in the same quarter of 2020.  In Q4 of 2020 vacancies had reached 25.9 percent, resembling a recession era.   Now, vacancies are back to 17.2 percent.  There are also new leases in progress that will further lower the vacancy rate.

While landlords may not have initially been thrilled to fill the avenue with doctors and dentists, the evolution makes sense in a number of ways. “The larger spaces on Third Avenue, in brick apartment buildings constructed in the 1960s and ’70s, are physically more efficient than on First and Second where there are a lot of tenements,” said Independent retail broker Stacey Kelz, who explained how it suits the needs of medical and wellness tenants.

Also, the streets offer a high- end crowd that has income to spend on healthcare and wellness perks.  “The Upper East Side in the 70s is the absolute densest neighborhood and full of people who are comfortable spending $100 to have their teeth cleaned,” said Cushman & Wakefield’s Steven Soutendijk, who closed a few of the deals in the neighborhood.  “They have a lot of disposable income to spend on their health, beauty and fitness coming out of the pandemic. They have a lot of dogs and cats. They need services you can’t get on Amazon or the web,” he added, noting that the previous brick and mortar retailers were beat out by online retailers, especially while the pandemic stay-at-home orders were in effect.

 

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