Retail continues to be a bright leasing sweet spot as brokers say their tenants are out seeking multiple locations while investors continue to purchase both buildings and retail condos to upgrade their tenancies.
Brooklyn has gone from wasteland to wonderland as more national retailers jockey for position. Neiman Marcus has even signed on for its very first city location with a 16,000-square-foot space for its LastCall division at 210 Joralamon St. This is the United American Land redevelopment of 48,000 square feet of retail at the Brooklyn Municipal Building called Brooklyn Heights Plaza where LastCall will join Sephora, It’s Sugar and Yoga Works.
The Empire Stores are being developed in Dumbo with West Elm as its anchor. Kushner Companies and RKF Holdings’ redevelopment of the Watchtower Buildings in Upper Dumbo is also expected to fill in with numerous retail tenants. Other stores are targeting Fulton Avenue, CityPoint and around Barclay’s Center as well as Williamsburg.
Retailers are also giving a hard look at Queens as the next Brooklyn, and focusing on Jackson Heights, said Ariel Schuster, executive vice president of RFK.
The Bronx will soon have the glamorous new enclosed Mall at Bay Plaza to be anchored by Macy’s and JCPenney by I-95 and the Hutchinson River Parkway. Further north on the Hutch, Simone Development Companies’ 42-acre Hutchinson Metro Center is getting more retailers, office tenants and a Marriott Residence Inn.
In Manhattan, Madison Avenue is tightening up and rents are rising. The Gagosian Gallery, already on Madison, also opened in 1,000 square feet in the base of 821 Park Ave. at East 75th Street. This is one of the few retail spots on an avenue lined with expensive co-ops.
Last fall, H&M opened its 60,000 square-foot store at 4 Times Square at West 42nd Street with Lady Gaga while in March, L’Express opened its 28,000-square-foot store on steroids with a performance by Robin Thicke.
Shoppers are gleefully continuing to walk down the Broadway promenade to Herald Square. Here, Urban Outfitters will soon open its 56,000-square-foot spread at Empire State Realty Trust’s 1333 Broadway. “That Urban Outfitters lease really signifies the changes going on in the area,” said Gerard Nocera of Herald Square Properties who is purchasing buildings in the area.
As SoHo and even Nolita now have skyrocketing rents — with SoHo breaking the $1,000-per-square foot threshold recently — Faith Hope Consolo, chairman of Douglas Elliman Retail, says the smaller retailers and restaurants are moving to the Bowery area.
Meanwhile, the Meatpacking District continues to transition, looking toward the opening of the new Whitney Museum. “It’s becoming the city’s testing ground for great design,” said Consolo. “We’re seeing pop-ups such as Pantone, and leases like The Kooples next to the Apple store. As long as the residential, the hotels and the restaurants remain solid, the next hot designer will continue to locate here.”
The retailer Billabong is back in the market aggressively said its broker, Paul Berkman, executive vice president of retail at JLL. Another of his clients, Modell’s, is also active and pursuing deals.
Similarly, Kim Mogull, CEO of Mogull Realty, said, “All of my clients are expanding and bullish about the market.”
Mogull says the Financial District has become a “must have” for any retailer or restaurant group. “Between the Trade Center, Brookfield Place, Goldman Sachs and Condé Nast, and all the new residential projects, that area is on fire as the residential, retail and office populations are growing exponentially.”
Along nearby Broadway, Zara will open a 30,000-square-foot, three-level store at 222 Broadway, Urban Outfitters opened in 21,000 square feet at 180 Broadway inside the Pace University dorm building and the Gap leased about 20,000 square feet at 170 Broadway.
“That neighborhood will continue to flower and we will see more retailers flocking to that corridor,” said Berkman.
But despite all the action and numerous luxury retailers announced at Brookfield Place, everyone has eyes on Westfield Group and is waiting for deals like Eataly to be announced and construction at the World Trade Center to be completed.
