New York Grocery Leases Power a 2025–2026 Rebound
Aldi, Lidl, Whole Foods Daily Shop, Wegmans, Sprouts and a wave of specialty operators are absorbing nearly every large box that hits the market.
Grocery-anchored retail in New York is the hottest it has been in a decade. National grocery transaction volume surged roughly 42% in 2025 to approximately $11 billion, cap rates compressed about 40 basis points to a 6.7% average, and tri-state premium centers are trading inside that range at 5.0–6.0%. Long Island retail vacancy sits at just 4–5%, Nassau mid-size asking rents climbed 11.3% year over year, and institutional players are consolidating the product. Every closed supermarket box in New York has an active tour list.
Wegmans entered Long Island at Lake Grove and is expanding in Harrison; Sprouts made its New York debut in Centereach and signed Smithtown and Levittown; Lidl doubled its Manhattan footprint with Kips Bay and the Lower East Side, added Downtown Brooklyn, Park Slope, Crown Heights, and East Williamsburg, and opened its first Westchester stores in Yonkers and Pelham Manor; Aldi signed its second Manhattan store at The Ellery in Times Square; Whole Foods signed its first Queens store in Ridgewood and is blanketing Manhattan with its new Daily Shop format; Uncle Giuseppe”s is backfilling three former Stop & Shop, King Kullen, and Babies “R” Us boxes; DeCicco & Sons opened a 50,000-square-foot flagship at Edge-on-Hudson; and Wakefern acquired the entire 17-store Morton Williams chain in October 2025.
Long Island leads the state
Long Island absorbed the heaviest Stop & Shop and King Kullen closures in 2024 — and replacement demand has been ferocious. Wegmans” February 26, 2025 opening at 3270 Middle Country Road in Lake Grove (roughly 101,000 square feet, 500+ employees) set the tone as the chain”s first Long Island store. Whole Foods followed by opening Holbrook at Shops at SunVet (43,000 square feet, March 2026) and signing Mount Sinai”s Crystal Brook Corner as its ninth Long Island store after Regency Centers acquired the former King Kullen-anchored plaza.
Uncle Giuseppe”s has been the single most active operator on Long Island backfills. The Melville-based chain signed three deals: 130 Wheatley Plaza in Greenvale (roughly 52,000 square feet, opening Q1 2026 — former Stop & Shop); 3284 Hempstead Turnpike in Levittown (50,000 square feet, late 2026 — former King Kullen); and Sayville Plaza in Bohemia (approximately 40,000 square feet, opened November 2025 — former Babies “R” Us).
Sprouts Farmers Market arrived in New York via Long Island. The chain opened its first New York store on January 30, 2026 in Centereach (24,000 square feet in a former LA Fitness box), announced Smithtown at Branch Plaza (backfilling a Fresh Market), and signed Levittown Shopping Center for a 2027 opening.
Aldi”s Long Island rollout accelerated with conversions of East Northport (former Barnes & Noble), Central Islip, Lake Ronkonkoma (former King Kullen, opened August 2025), Medford, Bethpage, and Great Neck (former Best Market at Kimco”s Gardens at Great Neck, opening summer 2026). Trader Joe”s approved the Miller Place store and purchased the 921,000-square-foot former CA Technologies headquarters in Islandia for $118.5 million as its East Coast distribution hub.
NYC small-format and ethnic grocers dominate
The defining NYC story is Whole Foods Daily Shop — Amazon”s 7,000–14,000-square-foot urban concept built to compete with Trader Joe”s. The Lenox Hill pilot proved out (42% of shoppers new or re-engaged), driving a rapid rollout: 409 East 14th Street at StuyTown (10,000 SF, May 2025); 301 West 50th Street in Hell”s Kitchen (8,500 SF, June 2025); and Williamsburg at 774 Grand Street (approximately 7,900 SF on a 12-year lease, February 2026).
Whole Foods” first Queens full-format store was the biggest NYC grocery lease of 2025. Signed December 2025, 55-60 Myrtle Avenue in Ridgewood takes approximately 22,000–28,000 square feet on a 15-year lease with landlord Norse Realty Group. Lidl and Aldi are the highest-volume NYC grocery tenants right now:
| Tenant | Location | Size | Status |
|---|---|---|---|
| Lidl | Kips Bay (Windsor Court) | ~20,700 SF | Feb 2026 |
| Lidl | Lower East Side | ~23,000 SF | Aug 2025 |
| Lidl | Chelsea (Penn South) | ~23,000 SF | Early 2026 |
| Lidl | Downtown Brooklyn | ~30,000 SF | May 2025 |
| Lidl | Park Slope | ~20,000 SF | Dec 2025 |
| Lidl | East Williamsburg | 26,568 SF | Signed |
| Aldi | Times Sq. (The Ellery) | 25,000 SF | 2026 |
| Aldi | Downtown Brooklyn | ~12,000 SF | Nov 2025 |
| Aldi | Staten Island | ~20,000 SF | Jun 2025 |
← Swipe to see more →
Food Bazaar executed the biggest Manhattan suburban-style anchor deal at 375 West 207th Street in Sherman Creek/Inwood — 37,212 square feet on a 25-year lease. The chain also opened an approximately 70,000-square-foot flagship on Linden Boulevard in East New York and purchased the 75,000-square-foot Northern Boulevard LIC building it already leased for $101.1 million.
The single largest Manhattan grocery transaction of the cycle wasn”t a lease — it was Wakefern Food Corp.”s August 2025 acquisition of all 17 Morton Williams stores (15 in Manhattan, 1 in the Bronx, 1 in Jersey City), closed in October 2025. The banner is being retained, but expect Wakefern-driven format investment across those 15 Manhattan boxes.
Westchester and the Hudson Valley
Wegmans Harrison is the most significant Westchester expansion story. At 106 Corporate Park Drive, Wegmans is in planning-board review for a new 20,000-square-foot retail pad on its 20.35-acre owned site (acquired 2015 for $26.5 million from Normandy Real Estate Partners).
DeCicco & Sons executed three transformative deals. Its 50,000-square-foot flagship at Edge-on-Hudson in Sleepy Hollow opened March 2025 (30,000 SF supermarket plus event space, bar and patio). The chain also announced a takeover of the closing DeCicco Family Markets in Scarsdale and signed a 20,000-square-foot former Stop & Shop in Greenwich, Connecticut.
Lidl arrived in Westchester at 2570 Central Park Avenue in Yonkers (29,208 SF, opened October 2025) followed by Pelham Manor (~29,000 SF, opened November 2024). Trader Joe”s announced its fifth Westchester store for Yonkers. Two Stop & Shop closures remain live backfill opportunities: 240 East Sandford Boulevard in Mount Vernon (~65,000 SF) and 7 Samsondale Plaza in West Haverstraw (~50,000 SF).
Upstate: Trader Joe”s, Tops, Capital Region
Trader Joe”s made two major upstate moves on Benderson Development sites: Glenmont Plaza in Bethlehem (14,779 SF, opened October 2025) and Eastgate Plaza in Clarence (~13,500 SF, opened December 2025). Price Chopper/Market 32 completed a 2024 ShopRite conversion wave — four stores opening June 14, 2024 across Albany, Colonie, Niskayuna, and North Greenbush. Tops Friendly Markets continues its renovation-heavy strategy with more than 50 store renovations since 2019 and over $100 million cumulative investment.
Aldi”s Capital Region expansion kicked off with Latham (20,664 SF ground-up, approved April 2025, opening 2026). BJ”s Wholesale got approval for a Rotterdam relocation to 880 Duanesburg Road — a 102,500-square-foot club with eight gas pumps built ground-up by Goddard Development Partners.
Where brokers should focus
The highest-probability pipeline is backfilling former Stop & Shop, King Kullen, Fairway, Best Market, Rite Aid, and Bed Bath & Beyond boxes between 20,000 and 40,000 square feet — the size range Aldi, Lidl, Sprouts, Uncle Giuseppe”s, and Food Bazaar are actively touring. Specific open assignments: Coram, Mount Vernon, West Haverstraw Samsondale Plaza, Middle Island Strathmore Commons, Glen Cove, Cortlandt Manor, Slingerlands, and Gloversville.
Ground-up grocery-anchored residential podiums are a winning second track — every major 2025–2026 Manhattan and Brooklyn Lidl or Aldi deal is in that product type. For Whole Foods and Trader Joe”s specifically, Benderson Development”s upstate track record, Kimco”s dominance on Long Island, Regency Centers” post-Urstadt-Biddle tri-state reach, and an experienced grocery-focused brokerage bench are the highest-frequency counterparties.
The single most important market fact for the next 12 months: cap rates are no longer falling. They”ve compressed into a stable 5.5–6.5% band for premium New York product, rent growth is now carrying returns, and institutional buyers are paying up. The next 12 months reward speed on new leasing execution rather than waiting on further cap-rate compression.
Sources
- JLL, “Grocery Tracker 2026.” jll.com
- Commercial Observer, “Whole Foods Is Coming to Queens With 22K-SF Deal,” December 2025.
- Commercial Observer, “Lidl to Open 27K-SF Grocery Store at 597 Grand Street,” March 2025.
- Commercial Observer, “Lidl to Open 21K-SF Grocery Store in Kips Bay,” February 2025.
- Commercial Observer, “Aldi Signs Lease for 25K-SF Grocery Store in Hell”s Kitchen,” August 2025.
- The Real Deal, “Grocery store Aldi”s massive lease led NYC”s top retail deals,” September 2025.
- The Real Deal, “Food Bazaar lays down $100M to buy its LIC location,” March 2026.
- Progressive Grocer, “Sprouts Farmers Market Opens 1st New York Store in Centereach.”
- Progressive Grocer, “Uncle Giuseppe”s to Open in Former Stop & Shop Store.”
- Wakefern Newsroom, “Wakefern Finalizes Purchase of Morton Williams,” October 2025.
- Supermarket News, “Wegmans announces dates for 3 store openings in 2025.”
- Whole Foods Market, “New Whole Foods Market in Holbrook, New York.”
- Greater Long Island, “Whole Foods coming to Mount Sinai.”
- Crain”s New York Business, “Whole Foods signs lease in Ridgewood, Queens.”
- Westfair Online, “Wegmans wants to add new building at Harrison supermarket site.”
- Progressive Grocer, “DeCicco & Sons Opening Latest New York State Location.”
- Shopping Center Business, “JLL Brokers $26.5M Sale in West Haverstraw.”
- The Shelby Report, “Tops Markets Completes $2.3M Store Remodel In Tonawanda,” February 2026.
- Dolfin Partners, “Long Island Retail in 2025.”
