About ten years in the past, it appeared like all the floor ground of Manhattan was on its option to changing into a financial institution. Or perhaps a drugstore.
Now, spurred by adjustments within the economic system and their companies, chain banks and pharmacies are closing areas and downsizing their New York footprints. Landlords, going through large areas they’ll’t fill, are chopping these storefronts up.
“You’re knocking a ten,000-foot Duane Reade into three or 4 areas,” stated Steven Soutendijk, vice chair and a retail dealer at Cushman & Wakefield. “And also you’re doing a Clean Avenue and a Naya and Sweetgreen and 1,000,000 various things.”
Take for instance a former Ceremony Help on West 97th Avenue and Columbus Avenue. The house is being damaged up and the food-hall chain Surprise has taken the primary bay, Soutendijk famous. On Eight Avenue and West forty second Avenue, a former Duane Reade is now a McDonald’s and a sushi restaurant.
Each chain banks and pharmacies fought for New York nook house from 2004 to round 2014, Soutendijk stated. The retailers have been extremely worthwhile, aggressive tenants, and had the drive to safe giant areas in high-traffic areas.
For banks, the directive was to get in entrance of individuals to gather their paychecks and deposits, stated Michael Miller, a retail dealer at TSCG.
“Nobody may pay greater than a financial institution. And naturally their credit score’s phenomenal,” stated Michael Miller, a retail dealer at TSCG. “They have been in all probability the best and greatest lease payers in our total trade.”
For shops like CVS and Walgreens, cash is comprised of the pharmacy within the again. However the odds and ends within the entrance — cleansing merchandise, greeting playing cards, power drinks — carry individuals into the shop.
Each sorts of companies have been generally paying way more than their neighbors, filling up the pockets of business landlords.
“There’s a whole lot of banks on the market which are paying 2.5x what market is,” stated Noam Aziz, managing director at Meridian Retail Leasing.
The financial institution and pharmacy takeover of New York’s streetscape didn’t come with out backlash. In 2012, the Metropolis Council handed zoning restrictions on the Higher West Facet banning banks from taking on storefronts wider than 25 toes.
Two years later, Manhattan had much more financial institution storefronts, peaking at 702 areas, in response to an evaluation from the Nationwide Neighborhood Reinvestment Coalition.
However now, each chain banks and drug shops are downsizing and shutting up outlets. Lots of these 15-year leases signed within the aughts and 2010s are expiring.
Nationwide developments have meant that the large banks merely don’t want all that house anymore, stated Jason Richardson, senior director of analysis on the NCRC. Federal rules within the wake of the worldwide monetary disaster standardized mortgage lending and made it a much less relational enterprise, whereas fin-tech companies encroached on small enterprise lending. Nationwide surveys present fewer persons are going to financial institution branches. In the meantime, consolidation within the trade has made some branches redundant.
“Yearly, a financial institution has to take a look at their steadiness sheet and say, ‘do we actually want this department?’” Richardson stated. “There’s received to be a whole lot of strain on them yearly to justify the existence of each department they’ve received of their footprint.”
Previously ten years, the variety of financial institution branches in Manhattan has fallen by almost 27 %, in response to an NCRC evaluation.
For drugstore chains, e-commerce retailers and mail-order pharmacies have lower into earnings, Miller stated. CVS introduced in 2021 it could be closing 900 shops nationally over three years, adopted by the extra closure of 271 shops introduced in 2025. In New York alone, Ceremony Help had 33 areas within the 5 boroughs earlier than it shut down final yr. The variety of chain pharmacies in New York Metropolis declined by 16 % between 2024 and 2025, in response to data from the Center for an Urban Future.
It doesn’t assist that chain pharmacies have been locking up their merchandise to forestall theft, which results in a less-than-leisurely procuring expertise. Walgreens’ former CEO Timothy Wentworth admitted throughout an earnings name in 2025 that locked-up gross sales circumstances do “influence how gross sales work by way of the shop as a result of whenever you lock issues up, for instance, you don’t promote as a lot of them.”
Soutendijk stated he’s personally discovered procuring on the Duane Reade under Cushman & Wakefield’s workplace “not a pleasing expertise.”
“You don’t should be a retail specialist to expertise that,” he stated.
When these companies pull out or transfer elsewhere, they depart landlords with large areas to fill. The everyday chain pharmacy was 8,000 to 12,000 sq. toes, Soutendijk stated. A financial institution department within the aughts was equally 6,000 to eight,000 sq. toes.
Different retailers simply don’t want that a lot house. They usually can’t pay these rents, even when landlords have come to anticipate them.
Aziz stated he’s advertising an 8,500-square-foot Manhattan storefront that has been vacant since 2019. Ceremony Help was paying $1.3 million per yr for the lease, however a brand new one will pull in simply $500,000.
The answer then is to cut up one storefront into a number of. That method, the landlords can start to method what they have been making earlier than, he stated.
Breaking apart a big unit might be costly. It sometimes means not simply placing up partitions however including HVAC into the separate items, placing in restrooms, and splitting utilities. Changing a former financial institution can imply eradicating an outdated vault — a six-figure expense, Miller stated.
Giant, institutional landlords don’t want a lot convincing. They’ve the capital to deploy to get their areas rented. Co-op boards and small landlords are prone to battle extra with making the funding, Soutendijk stated.
When these landlords can discover a single-tenant to fill their areas, it’s sometimes smaller grocery shops, Miller stated. Complete Meals’ small-format shops, known as Each day Outlets, have been popping up in former drug shops and banks. Within the outer boroughs, two former Ceremony Aids in Ridgewood and Bedford-Stuyvesant are being transformed right into a Whole Foods and a Foodtown, respectively.
However total, turning giant financial institution branches into smaller storefronts makes for a extra various streetscape, Soutendijk stated. The range advantages retail customers and in addition landlords, who now have some safety in case one tenant can’t pay.
Those that complained concerning the financial institution and drugstore takeover, Soutendijk stated, are getting their want.
“Now drug shops are being damaged up into Starbucks and Nayas,” he stated. “I’m certain the subsequent set of rules will probably be anti-Sweetgreen, anti-Clean Avenue.”
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