Real Estate

NYC’s Third Avenue on UES goes from retail hub to stretch of doctors, dentists

The doctor is in on Third Avenue from Bloomingdale’s north to East 79th Street. So are the dentist, the veterinarian and your neighborhood cryotherapist. The corridor that was once known for sportswear now resembles a mile-long, health-and-fitness fair more than a traditional shopping stretch.

The twenty blocks through the Upper East Side’s middle-class (by Manhattan standards) spine now boast three urgent-care medical facilities, two dental clinics and two veterinary facilities for pets. The names include CityMD, MedRite and MyDoctor; Tend (“Look Forward to the Dentist”) and yet-to-open Dntl Bar; and Small Door Veterinary and Bond Vet, which need no explanation.

There are also more than a dozen spas and “wellness centers.” They offer cryogenic treatments, hyperbaric chambers and esoteric skin regimens. Even among the few true apparel retailers, the largest are fitness-oriented such as Lululemon and Alo Yoga Sanctuary.

Unlike in the past, they’re not tucked away on upper floors or in basements, but at ground level. Small Door Veterinary proudly announces itself with large signs in part of what was the long-vacant Grace’s Marketplace space.

Exterior of a City MD
CityMD was a pre-pandemic pioneer, but was joined by other medical and wellness tenants when the pandemic crisis took hold in 2020.
Alec Tabak for NY Post

The sidewalk-level med/health influx helped to lift the Third Avenue retail market out of the doldrums. According to Cushman & Wakefield, asking rents between 59th and 79th streets rose from $206 to $221 from the fourth quarter of 2020 to 4Q 2021.

More meaningfully, availabilities that reached a recession-like 25.9 percent in the fourth quarter of 2020 dipped to a more manageable 17.2 percent in the same period of 2021. New leases in the works will likely bring the vacancy rate down ever further.

CityMD was a pre-pandemic pioneer, but was joined by other medical and wellness tenants when the crisis took hold in 2020. The transition dramatically illustrates Manhattan’s evolving retail scene as landlords struggle to fill vacant storefronts.

Exterior of Small Door Veterinary at 1231 Third Ave in Manhattan
Recent closings of large clothing stores like The Gap left Third Avenue landlords with lots of highly visible, empty square feet, leaving room for businesses like this Small Door Veterinary.
Alec Tabak for NY Post

Recent closings of large clothing stores like The Gap and American Apparel left Third Avenue landlords with lots of highly visible, empty square feet. Independent retail broker Stacey Kelz said that for medical and wellness tenants, “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.”

There’s a demand side, too. Cushman & Wakefield’s Steven Soutendijk, who repped the landlord in the Tend lease, said, “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.

“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.”

Exterior of Restore Wellness with a patron walking into the front door
Landlords have warmed up to the idea of medical tenants at street level, like this Restore Wellness at 1320 Third Ave.
Alec Tabak for NY Post

Newmark’s Ross Berkowitz added that the new class of tenants reflects a younger vibe and concern for well-being in a difficult time. “People want the best for themselves and for their animals,” he said.

Not all landlords initially loved the idea of medical tenants at street level. CBRE broker Rob Bonicoro, who represented walk-in clinic One Medical in a new lease at 919 Third, which is south of Bloomingdale’s, said, “Maybe landlords preferred traditional retail tenants, but they had to change their opinions” as sportswear buyers increasingly shopped online and as the pandemic kept people indoors. “The perception changed, too,” Bonicoro said. “They’re beautifully built-out spaces. They don’t look like old-fashioned medical offices any more.”

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