Shoppers rejoice, Big Apple retail not only survived the pandemic blues, it thrived unlike any other sector of the city’s commercial market. Owners that could lease for less money and shorter terms did so, and those generous terms triggered a feeding frenzy for well-located spaces.
“We’ve seen a fairly healthy amount of recovery,” said Gene Spiegelman of Ripco. “Rents are down 50%.”
Vacant restaurants were some of the fast movers, as were luxury fashion fronts.
Dolce & Gabbana leased the unique former Hermès store at 695 Madison Ave. Prada paid billionaire retail sultan Jeff Sutton $835 million to buy a building at 724 Fifth Ave., as well as the adjacent structure at 720 Fifth, where Abercrombie & Fitch once ruled.
Sutton had quietly been planning a slender new tower there, next to the Aman Hotel in the Crown Building. It’s unclear if that will still materialize.
Sutton also sold the space now occupied by Versace at 747 Madison Ave. at East 65th Street to the Dyson family for $135 million.
Other fashion brands on the prowl include Zara, Mango, Lululemon, Arc’teryx and Vans.
“A global luxury brand is going to create a long-term flagship environment that they will invest in heavily and operate themselves,” said Cassie Durand of CBRE. “Madison Avenue is in a good position and we are seeing good absorption from 57th to 64th streets, and even 65th to 72nd is seeing quite a lot of activity.”
Her client, Milan-based Del Core, will open in February at 789 Madison Ave. by East 67th Street.
“There’s been a resurgence on Madison in terms of rents and the quality of tenants and leasing of space,” said Jared Epstein of Aurora Capital Associates.
Meanwhile, Aurora is partnering with William Gottlieb Real Estate on a Meatpacking District retail corridor that recently saw a 13,000-square-foot lease go to Saint Laurant at No. 70-74 Gansevoort St.
“It’s been super resilient and categories including luxury, food and beverage are all expanding and taking space left and right.”
Brandon Singer of Retail by Mona
Nearby, Aurora is overseeing the historical redevelopment of the triangular Dos Caminos building between Ninth Avenue and Hudson, while real estate investor Tavros is restoring the retail and adding a tower to 50 Ninth Ave.
Brandon Singer of the brokerage Retail by Mona brought Fiskers to 401 W. 14th Street, the former Hugo Boss space next to Apple. Gucci opened at 400 W. 14th St., and Lladró at No. 413. “It’s been super resilient and categories including luxury, food and beverage are all expanding and taking space left and right,” Singer said.
On Washington Street alone, Shake Shack opened at No. 820; a Studs subleased No. 875; and at No. 812, the former Intermix on the corner of Gansevoort is ready for another retailer. They are all in but Tesla may soon be out. Its 16,000 square feet at 860 Washington is available for sublease with Compass.
Unlike luxury retail, big-box stores are moving slower, leaving massive spaces available.
In Noho, the spectacular former Crate & Barrel space at 611 Broadway is seeking occupants for its 40,000 square feet through Ripco with an asking rent of about $7.5 million per year.
The old Best Buy at 880 Broadway has another 46,000 square feet available, also through Ripco. At Lafayette Street, the former Showfields has 13,500 square feet available at 11 Bond through Retail by Mona. Uptown, the prior Bed Bath & Beyond at Broadway and West 65th Street has 60,000 square feet, mostly below grade, available through Ripco.
“We’ve seen limited demand for the large boxes and it’s a tough category,” Spiegelman said.
Still, German-based grocer Lidl has committed to the base of two upcoming apartment projects, leasing 23,000 square feet at MAG Partners’ 335 Eighth Ave. in Chelsea and 25,000 feet at William Macklowe Company and GreenBarn Investment Group’s 120 Fifth Ave. in Park Slope.
But as average asking rents on the gold coast of Fifth from Rock Center to 57th Street rise to $2,300 a foot, leasing a large store becomes a financial struggle for all but the most upscale jewelry and fashion tenants. That’s why, where possible, building owners are trying to carve up large spaces into more palatable bites. Swarovski is now open in a portion of the former Gap at 680 Fifth Ave. that has “two more jewel boxes and a lot of activity,” said Steven Soutendijk of Cushman & Wakefield.
The Upper West Side is also strong with retailers looking between 67th and 72nd streets for rents in the mid-$400s per foot. “There isn’t a single store available between Lincoln Center and 72nd St.,” said Soutendijk. “Everything is mobbed.”