Fall has turned out to be a season full of leasing for retail real estate. Deals with Saks Fifth Avenue, Neiman Marcus, Lowe’s and Amazon have added to the growing retail excitement that will also include the first Nordstrom, in the base of a 1,775-foot tower at 225 W. 57th St., that will shake up the shopping landscape.
Saks’ parent, Hudson’s Bay Company, signed leases with Brookfield Property Partners to open an 85,000-square-foot Saks Fifth Avenue store in Brookfield Place, at 225 Liberty St., and a 55,000-square-foot Saks OFF 5TH store at One Liberty Plaza.
HBC is also leasing 400,000 square feet for offices at Brookfield Place as its local headquarters.
The city’s first Neiman Marcus will anchor the 1 million-square-foot Hudson Yards shopping podium with a 250,000-square-foot multilevel store that will open in fall 2018.
Amazon recently announced it will have its first ever retail distribution location and 400,000 square feet of offices at 7 W. 34th St., opposite the Empire State Building.
The home improvement store, Lowe’s, has also agreed to lease its first two Manhattan retail locations: at 2008 Broadway at W. 68th St. and 635 Sixth Ave. in Chelsea, in an area with numerous big-box stores.
Both will be 30,000 square feet and follow Home Depot’s earlier push into the city.
“All of the developers are 100 percent focused on what is being utilized on the ground floor,” said Brad Cohen of Eastern Consolidated, who is representing several residential projects.
“It is so important to have the right tenants and to have what their residents and the surrounding area can utilize.”
For instance, Cohen explained, “We envision having a tenant that becomes an extension of the living room so the residents can go downstairs to the wine bar or café.”
Fashion firms and national tenants remain on the prowl for locations but as always, building owners worry about what goes in on the ground floor.
Peter Riguardi, tri-state president, JLL, said, “Today, we need to make [the building] attractive to millennials so we need to get a retailer that makes it attractive.”
By 2020, 30 percent of all retail sales will come from the millennials. “The millennials want to live in the city, and from a retail perspective, the millennials are our future,” Joanne Podell, vice chairman of retail services at Cushman & Wakefield, said at a recent Real Estate Board of New York luncheon where Riguardi and residential broker Diane Ramirez, CEO of Halstead, also spoke.
“We have areas where if you don’t have retail, you don’t survive,” said Ramirez, pointing to Queens, where there are many new residential projects but a lack of services and choices. “It’s an incredible community but it needs the retail.”
Brooklyn is also now on the radar of many international tenants. “It is less touristy and more ‘New Yorkery’ than Manhattan, which they feel has too many tourists,” explained David LaPierre, executive vice president, CBRE. “We are working with a half a dozen brands that want to be there.”
The Meatpacking District owners are also hoping the upcoming Whitney Museum will draw a more sophisticated customer base with the potential to spend and eat in the area.
All around town, in order to get more street presence, schools, exercise joints and urgent care centers are now gobbling up ground-floor locations rather than leasing upstairs. “In certain areas in residential neighborhoods they are filling in the gaps,” said Hal Shapiro, managing director of Winick Realty Group.
Chairman of retail for Douglas Elliman, Faith Hope Consolo, has placed many medical groups in ground-floor spaces. She just represented the building owner in a 1,500-foot lease to the ballet-inspired fitness chain, pure barre, on a ground floor at 412 Columbus Ave., between W. 79th and 80th streets.
“All the millennials want is to eat, drink and work out,” Consolo quipped. “Then they check in with their doctors.”
Ariel Schuster, executive vice president of RKF, observed that food is one of the few things the Internet can’t take away. “In New York, people still need to go out to lunch and are willing to pay more for fresh food,” he said.
Tourists and their free spending are also welcomed by retailers.
Thomas Durels, executive vice president and director of leasing for the Empire State Realty Trust says, “We are seeing a steady increase in the number of tourists and international shoppers that walk down Broadway from Times Square and are going to either Macy’s or the Empire State Building or both.” Over 100 million pedestrians a year pass through the W. 34th Street corridor.
Durels has three availabilities across W. 34th Street from the upcoming Amazon store, but is always picky about what is in the base of the world-renowned tower.
The building is now attracting more tech and media tenants with millennial employees.
Further west, ESRT is now marketing the 89,000-square-foot former Woolworths and Footlocker multi-level retail space at 112 W. 34th St.
Times Square is still one of the hottest markets, LaPierre said. Because the stores have longer selling hours, “For some brands it’s the top of their food chain,” he said of their sales figures.
Vornado Realty Trust’s new 60,000 square feet of retail space at 1535 Broadway fronting the Marriott Marquis is giving more stores the ability to lease. The site is fronted by the largest signage screen in the world with 4,000 LED bulbs.
And 57th Street is another example of a market going through a major transformation, with several ultra-luxury residential towers entering the market, said Jedd Nero, principal and managing director of retail services at Avison Young.
He is marketing a unique retail showroom at 24 W. 57th St. with 3,000 feet on the ground and an all-glass façade that showcases a floating spiral staircase.
With prime rents in the corridor ranging from $275 to $700 per foot, another fashion house or gallery may grab the opportunity.
“There is a tremendous interest in 57th as the retailers recognize the changes that are coming, and that Nordstrom will be anchoring the corridor,” said Nero. “It will become a major draw.”
Help me help you
Downtown’s retail experience at Brookfield Property Partners’ Brookfield Place is planning to have a concierge center that will cater to both international visitors and locals.
“They will also offer a style consultant, a local package service, a reservation assistant and, naturally, multi-lingual staff,” said one source with knowledge of Brookfield’s plans.
One of the benefits for Brookfield Place shoppers will be the ability to shop and then have the concierge deliver the packages to one’s home, hotel or workplace. While many malls have concierges or information booths, it seems that Brookfield intends to take the concept further — almost to what you’d expect from a hotel concierge.
Coming hand in hand with this luxe treatment is high-end retail. Burberry, Salvatore Ferragamo and Hermès are set to open. Others will include British brand Paul Smith, J.Crew — even local names like Satya jewelry and Babesta.
Brookfield declined comment.
