NORTHEAST SNAPSHOT, APRIL 2008
New York City Retail Market
In a city long known for its retail vitality, Manhattan retail vacancy rates have remained low — as consumer demand is stronger than ever. The Moinian Group, an owner, manager and developer of more than 25 million square feet throughout the U.S. and abroad, witnessed strong absorption throughout the New York City portfolio in the last year, and we expect this to continue into 2008 and beyond.
Demand for first-class retail, such as the Fifth Avenue, Madison Avenue and other world-renowned shopping districts, remains strong and bring value to the right firms selling the right products. In the heart of the Times Square district, Kira Plastinina, a fashion design firm, has signed for 6,105 square feet at 509 Fifth Avenue between 42nd and 43rd Streets. Trafficked by tens of thousands of people each day, the space offers incredible visibility and is proximate to other major clothing retail chains such as H&M and BCBG. Additional Manhattan-based Moinian Group retailers include Fossil, LensCrafters, Comp USA and Chase Bank.
Emerging neighborhoods, such as Manhattan’s far West Side, are ripe for new retailers to operate — particularly as these neighborhoods pick up speed with luxury condominiums, convenient transportation and incredible access to all world-class shopping and office districts. Hundreds of thousands of square feet of new development is planned for this submarket in the next few years. An 11,500-square-foot leased signed by The Market Diner at 572 11th Avenue is an example of this neighborhood’s continued appeal.
As the market stabilizes itself, central opportunities in the right neighborhoods can appear in the right locations. Galleria, centrally-situated at 115 East 57th Street between Park and Lexington Avenues, is almost fully leased with the exception of two retail availabilities including a 2,100-square-foot space and a 3,650-square-foot space — ideal for a spa or health-related tenant in keeping with the medical usage the building maintains. The retail market is ripe for a top spa, salon or health venue to tap, as a captive audience of professional and well-heeled professionals are effortlessly reached each day.
Retailers can benefit not only from a store’s location, but from the prestige of a building itself. At Galleria, The Moinian Group recently completed an ambitious capital improvement program, which included an attractive lobby, renovated corridors and common areas, and careful restoration and cleaning of the property’s façade. Improvements and attentive management teams help to create the environments in which people want to work, live and shop.
It is always difficult to pinpoint trends given the unique complexity of the Manhattan retail marketplace, as the city can be an anomaly when compared to other markets. However, food and beverage, as well as drugstore venues, have proven successful and are snowballing as corner locations and other prime spots become available when leases expire or businesses change direction.
Downtown Manhattan and the Wall Street area have experienced a dramatic upswing in the last year alone. With such retailers as Thomas Pink, Tiffany’s and Canali, and amazing restaurateurs entering the market such as Wolfgang Puck, the strength of Downtown evidences this excitement and we believe this unparalleled retail scene will maintain and expand. At 90 John Street, we recently completed a new storefront. Office tenants in this 29-story, mixed-use property — which includes a luxury rental residence on top — include Food Bank of New York, Merritt & Harris and Gold’s Gym. At nearby 17 Battery Place, we are offering retail, both centrally-situated in the heart of this historic and amazing neighborhood.
In any retail market in the U.S. and beyond, retailers require a location trafficked by the right audiences, convenient access to transportation and parking, and a responsive management team.
— Kimia Shadrokh is an associate director at The Moinian Group
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