The headlines this week regarding the New York City retail market might seem alarming at first glance. Reports indicate a 1.3% decline in chain store locations across the fiveboroughs—a net loss of 112 stores. For many looking in from the outside, this signals a market contraction.
But for our clients at Schuckman Realty, this signals a market correction—and a distinct opening for new deal-making.
As we head into 2026, the “flight to the Sunbelt” narrative is loud, but the reality on the ground in the Tri-State area is far more nuanced. Here is what landlords and retailers need to know right now, and how we are advising our clients to pivot.
1. AAA “Corporate” Void is Being Filled by “Power Franchisees”
While some corporate chains optimize their portfolios and exit secondary locations, high-capital franchise groups are aggressively stepping in.
The Evidence: Just this week, Doherty Enterprises—one of the region’s largest franchisee groups—signed an agreement to bring 27 Qdoba Mexican Eats locations to the NY/NJ market.
* The Landlord Opportunity: Corporate signatures are great, but multi-unit operators like Doherty (who also run Applebee’s and Panera) offer comparable credit strength and are actively hungry for space right now.
* Our Strategy: We are actively identifying spaces that fit the footprint of these “Power Franchisees”—2,000–3,500 SF second-generation restaurant spaces are premium assets in this climate.
2. Strategic “Right-Sizing” vs. “Retreating”
The “net loss” of 112 stores isn’t just closures; it’s a recalibration. Retailers are trading quantity for quality.
* Chipotle just opened its 4,000th store and is rolling out new high-efficiency formats. They aren’t leaving; they are becoming more selective about the efficiency of their real estate.
* Lululemon is pushing ahead with global expansion despite C-Suite shakeups.
* The Takeaway: The tenants are still here, but their site criteria have changed. Schuckman Realty’s tenant rep team is dialed into these new “efficiency-first” requirements, ensuring we match the right tenant to the right density.
3. The Sunbelt Competition
We know capital is looking South—Charlotte, NC was just named the #1 retail market for rent growth.
However, NYC offers what the Sunbelt cannot: Unmatched Density.
While other markets offer sprawl, the NY Metro area offers volume. For retailers like Costco (which just reported a 20.5% surge in digital sales but relies on physical hubs) and Walmart (opening new Supercenters), the density of the Northeast remains a critical logistics and sales engine.
4. 2026 Outlook: The “Active” Categories
If you have vacancy in your portfolio, here is where the activity is coming from in Q1 2026:
* Fast Casual (QSR): (e.g., Qdoba, Huey Magoo’s)
* Essential Retail: (e.g., Batteries Plus, which just hit 50 states)
* Grocery Anchors: (e.g., Sprouts Farmers Market is expanding; strong grocery anchors remain the gold standard for investment sales value).