BUY'S THE LIMIT
Forget old Fifth Ave.: Retail biz bets on new construction spaces
QUARANTINING shoppers are coming out of their closets to be greeted by new stores as retail rents retreated. In retail-dense neighborhoods like Meatpacking and Soho, shop owners found especially welcome opportunities.
Uptown stalwart Givenchy, for instance, is opening a Soho outpost at 92 Greene St., while Jonathan Adler is returning to the same nabe at 382 West Broadway, which provides a blank canvas for his own branding.
In the Meatpacking District, Gucci has leased the entire 26,600-square-foot base of 446 W. 14th St. for the holidays.
Many retailers are using deals as an opportunity to upgrade from side streets and showrooms to a “proper” retail store with a strong presence or moving from e-commerce to having a physical presence in what is dubbed “clicks to bricks,” Michael Glanzberg, managing principal of Sinvin Real Estate, said. The standout success of the Harry Potter store at 935 Broadway at East 22nd Street in the Flatiron District is a prime example.
Meanwhile, industry observers and politicians are fretting about the shuttered storefronts along swaths of Madison and Fifth avenues. “It’s not so bright in the traditional shopping areas that rely on tourists,” said Richard Hodos, vice chairman with CBRE, especially since international visitors plunged from 13.5 million in 2019 to just 2.5 million in 2020, according to NYC & Company. “Madison is like a smile where some teeth are missing and some are bright and shiny.”
A shining spot is Dolce & Gabbana, at East 69th Street, which is beautifully decorated and doing plenty of business.
On the same block at No. 818 Madison, the folks at Monique Lhuillier were busy dressing window mannequins in the latest black designs as passersby drooled at the idea of dressing up and attending in-person galas again.
The Apple store continues to be a destination at 974 Madison Ave. at East 74th Street, as well as in the Meatpacking at 401 W. 14th St. at Ninth Avenue, brokers say. Peter Braus, principal of Lee & Associates NYC, called Midtown a “donut hole” with action all around it.
“What is happening in Soho and other neighborhoods is exciting,” Braus said. “Tenants are coming in and looking to exploit these rents that haven’t been seen since I came into the business 20 years ago.”
Meanwhile in Brooklyn, the Real Estate Board of New York found that retail rents dropped by 10% or more in 10 of its 17 corridors, with Dumbo experiencing a drop of 23%.
Yet the neighborhoods where people worked from home, such as Cobble Hill and Park Slope, did better with the latter seeing a 10% bump in average asking rent yearover-year.
Matthew Krell of AMPS, who represented Patagonia in its first Brooklyn lease for 12,000 square feet, says the nabe didn’t experience the exodus of residents.
“Everybody was there and they didn’t go to their second home, and there’s been a huge push from retailers.”
Nike opened at 87 N. 6th St. and is a concept that is driven by the online sales in that ZIP code.
“These stores could serve as return and fulfillment centers,” said Krell. “They get as close to the customer base as possible and make the transactions seamless, and is why we have a push from national retailers in the neighborhoods.”
Acadia’s City Point project in downtown Brooklyn is getting more leasing action as Lululemon opened — although some of the former Century 21 space stills needs tenants.
“Retailers want to be near them,” said Ariel Schuster, vice chairman of Newmark who represents the project.
Furniture store Joybird is also doing “so, so well” he said, while family store Camp and the McNally Jackson bookstore also leased. Target is the anchor at that project.
At Extell’s residential project One Manhattan Square Brooklyn Fare Kitchen & Market has signed a 25,000-square-foot deal,
Schuster said that these deals are happening because landlords and tenants are finally sitting down to work together and negotiate more flexibility, more term options, as well as kick outs, concessions and percentage rents.
“The deals are all over the place and interesting and creative,” Schuster said. “They see they need something that works for both.”