Why is F&B such a large share of NYC retail leasing in 2026?

F&B accounts for 45 to 60 percent of new NYC retail leasing in 2026 for three structural reasons. F&B cannot be replaced by online retail since in-person dining is a distinct product. NYC demographics support F&B demand through high residential density, high disposable income, and high frequency of eating out, plus tourism on top. F&B operators have access to private equity capital that fashion operators no longer do. The combination produces sustained F&B share growth.

Is F&B dominance in NYC retail a long-term trend?

F&B dominance in NYC retail is largely a structural long-term trend with some cyclical components. The structural drivers including online retail competition, demographics, and capital availability are unlikely to reverse quickly. The cyclical components including post-pandemic recovery and fashion retail consolidation may moderate over time. F&B will likely remain the largest single category of new retail leasing for the foreseeable future, even if its share moderates somewhat from current peak levels.

Which NYC submarkets have the highest F&B leasing share?

Bedford Avenue in Williamsburg has the highest F&B share of recent retail leasing, around 70 percent. Hudson Square is F&B-heavy due to the daytime office base. UES residential cross streets are F&B-heavy due to residential density. NoLita has a strong F&B component on Elizabeth and Mott Streets. Prime SoHo has lower F&B share because rents only work for very high-margin retail or very high-volume F&B. Submarket character drives the F&B share more than citywide averages suggest.

Should landlords prioritize F&B tenants in NYC retail?

Landlords with restaurant-capable spaces have material leverage in 2026 because the pool of F&B operators looking for capable spaces exceeds the supply. Landlords without restaurant-capable infrastructure should consider whether the cost of adding gas service, ventilation, and other build-out is worth it to access the F&B demand. The math often works on spaces sitting vacant longer than six months. F&B will continue to be the largest source of NYC retail demand. Adapting space to capture that demand is increasingly worth the investment.

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Market IntelJuly 20, 20264 min read

Why F&B Dominates Manhattan Retail Absorption

F&B has been the largest share of NYC retail absorption for two years running. Here is what is structural and what is cyclical.

Jack Baum·Gravity Realty Group

F&B has been the largest share of NYC retail absorption for two years running. The pattern is no longer surprising. The question is whether it is structural or cyclical. After two years of watching the data and signing the leases, my read is that most of it is structural.

Here is why F&B keeps eating Manhattan retail.

The basic numbers

In 2024 and 2025, F&B accounted for somewhere between 45 and 60 percent of new retail leases in Manhattan, depending on the data source and the submarket. The next largest categories are wellness and fitness (around 15 percent), beauty (around 10 percent), and fashion (declining, somewhere around 10 to 15 percent).

F&B is the only category that has grown share consistently since 2022. Every other category is flat or down.

The structural reasons

Three things drive the structural part of F&B dominance.

First, F&B cannot be replaced by online retail. You cannot ship a meal experience over the internet. Delivery exists, but in-restaurant dining is a distinct product. The physical space is essential to the offering.

Second, NYC demographics support F&B demand. High residential density. High disposable income. High proportion of people who eat out frequently. Tourism on top of all of that. The underlying customer base for F&B in Manhattan is strong.

Third, F&B operators have access to capital that fashion operators no longer do. Private equity has poured money into restaurant groups. The capital fuels expansion. Expansion means new leases.

The cyclical reasons

Two cyclical factors are also pushing F&B share higher right now.

First, the post-pandemic recovery in restaurant demand is still playing out. People are eating out more than they did in 2020 to 2022. Some of that is permanent. Some is cyclical and will reverse if the economy slows.

Second, fashion retail consolidation has freed up real estate for F&B operators. When a clothing brand closes a Manhattan flagship, the space often gets reabsorbed by an F&B operator who can use the footprint with modest reconfiguration.

The supply constraint

F&B has a physical infrastructure requirement that limits where they can go. Gas service. Ventilation. Grease trap capacity. Loading. Bathroom configuration. Many available retail spaces cannot accommodate F&B without significant build-out.

This means the F&B share of available restaurant-ready space is higher than the F&B share of total available space. In some submarkets, restaurant-ready spaces lease within weeks while non-restaurant spaces sit for months.

The corridor effect

F&B share varies by submarket. On Bedford Avenue, F&B is probably 70 percent of recent absorption. In prime SoHo, fashion still holds a larger share because the rents only work for high-margin retail or very high-volume F&B.

Cross-corridor patterns matter. Hudson Square is F&B heavy because of the daytime office base. UES cross streets are F&B heavy because of residential density. Tribeca is mixed. Madison Avenue is fashion and luxury dominant. The submarket determines the mix.

What this means for tenants and landlords

If you are a non-F&B tenant in a submarket where F&B dominates, you have more deal room because you compete with fewer other operators for the space. You are also fighting against a landlord preference for F&B in some cases.

If you are a landlord with a restaurant-capable space, you have leverage. The pool of F&B operators looking for capable spaces is larger than the supply.

For context on where the F&B absorption is actually happening, see the most active submarkets piece.

Frequently asked questions

Why is F&B such a large share of NYC retail leasing in 2026?: F&B accounts for 45 to 60 percent of new NYC retail leasing in 2026 for three structural reasons. F&B cannot be replaced by online retail since in-person dining is a distinct product. NYC demographics support F&B demand through high residential density, high disposable income, and high frequency of eating out, plus tourism on top. F&B operators have access to private equity capital that fashion operators no longer do. The combination produces sustained F&B share growth.
Is F&B dominance in NYC retail a long-term trend?: F&B dominance in NYC retail is largely a structural long-term trend with some cyclical components. The structural drivers including online retail competition, demographics, and capital availability are unlikely to reverse quickly. The cyclical components including post-pandemic recovery and fashion retail consolidation may moderate over time. F&B will likely remain the largest single category of new retail leasing for the foreseeable future, even if its share moderates somewhat from current peak levels.
Which NYC submarkets have the highest F&B leasing share?: Bedford Avenue in Williamsburg has the highest F&B share of recent retail leasing, around 70 percent. Hudson Square is F&B-heavy due to the daytime office base. UES residential cross streets are F&B-heavy due to residential density. NoLita has a strong F&B component on Elizabeth and Mott Streets. Prime SoHo has lower F&B share because rents only work for very high-margin retail or very high-volume F&B. Submarket character drives the F&B share more than citywide averages suggest.
What are the physical requirements for F&B retail space in NYC?: F&B retail space in NYC requires specific physical infrastructure including gas service for cooking, exhaust ventilation for kitchens, grease trap capacity for plumbing, adequate loading access, and sufficient bathroom configuration. Many available retail spaces cannot accommodate F&B without significant additional build-out costs. Restaurant-capable spaces with existing infrastructure lease materially faster than general retail spaces. The supply of restaurant-ready space is smaller than the supply of total available retail space.
Should landlords prioritize F&B tenants in NYC retail?: Landlords with restaurant-capable spaces have material leverage in 2026 because the pool of F&B operators looking for capable spaces exceeds the supply. Landlords without restaurant-capable infrastructure should consider whether the cost of adding gas service, ventilation, and other build-out is worth it to access the F&B demand. The math often works on spaces sitting vacant longer than six months. F&B will continue to be the largest source of NYC retail demand. Adapting space to capture that demand is increasingly worth the investment.