The news is rife with stories regarding retail bankruptcies, store closures, challenges facing conventional shopping centers, and consolidations by department and specialty stores. Although not immune to some of these challenges, the Manhattan retail environment has enjoyed much activity during the second half of 2016 and the first part of 2017. To be sure, some submarkets and certain retail corridors have seen an increase in vacancies and a corresponding fall in asking rents. However, a number of new retailers have entered the market and certain strong retail brands have right-sized or repositioned themselves in the market. One high-profile shopping center opened its doors, and there is considerable retail development underway. It’s a big story but here are some highlights.
Stephen Stephanou, Crown Retail Services
Lower Manhattan
There has been considerable focus on Lower Manhattan in the past several years, and this continues. On the grand scale, the opening in August 2016 of Westfield’s World Trade Center was the culmination of years in planning, constructing and leasing this $1.4 billion development. This multi-level project contains an assortment of national and international tenants, including fast fashion and better retail stores, such as Victoria’s Secret, Sephora, H&M, John Varvatos and London Jewelers. A 60,000-square-foot Eataly is the principal food and dining venue; it sits on the third floor above the street with views of the 9/11 Memorial, the Freedom Tower, and other sites in Lower Manhattan. The shopping center also acts as the connector between the newly opened Fulton Street Transit Center to the east and Brookfield Place across West Street to the west. Aside from tourists, the project also benefits from more than 250,000 daily commuters coming to and from New Jersey through the PATH train station, which is located within the center.
Saks Fifth Avenue opened its women’s store at Brookfield Place in August in 85,000 square feet, and a separate 16,750-square-foot Saks Men’s store just opened. For those more focused on value shopping, Target opened a 130,000-square-foot store in Tribeca, and will open another store in the East Village. And Marshalls has just announced a 66,000-square-foot store near the World Trade Center and Brookfield Place.
As to the streetscape, the Broadway corridor in particular has welcomed retailers that had previously not ventured downtown. These include Anthropologie, which is under construction and will be joining relatively recent additions like Urban Outfitters and Zara. Nobu will be opening at 195 Broadway and a new Danny Meyer restaurant concept has signed a deal for a large space on the 60th floor of 28 Liberty. All are close to the highly successful Century 21 flagship, hugely popular with both tourists and locals for many years. Howard Hughes’ re-scripting of South Street Seaport is well underway after recovering from the damage of Hurricane Sandy. Ipic has opened with its luxury dine-in theater. Additionally, 10 Corso Como, the Milan, Italy-based gallery and lifestyle concept store has announced that it will be joining South Street Seaport, in addition to a Jean-Georges food emporium. These are all slated to open in 2018.
The Meatpacking District
While Meatpacking has been challenging for some apparel and high-fashion brands, it continues to evolve as a place for experiential retail, food and beverage, and nightlife. The opening of the Whitney Museum and the completion of the very popular Highline (which now has its northerly terminus at Hudson Yards), have contributed to the popularity of this trendy submarket. With its restaurants, nightlife and boutique hotel destinations, the buzz continues its appeal to locals, fashionistas, and discerning visitors. After expanding and remodeling its existing store in the Flatiron District, Restoration Hardware is completing its new Meatpacking flagship in addition to a boutique hotel. Celebrity hang-out Pastis is rebuilding in a new location while Dean & DeLuca, now under new ownership, is under construction for its new larger grocery and dining concept store. Tesla has signed a lease for a showroom of more than 7,000 square feet between the Standard Hotel and the Diane von Furstenberg headquarters. Samsung opened an amazing concept store in 2016. Jamestown has also been exploring ways to expand the highly successful Chelsea Market to the north, which is focused on food. Starbucks’ 20,000-square-foot Roastery concept store is under construction across the street on Ninth Avenue and expected to open in 2018.
Some Key Developments
Looking to the immediate future, the most significant retail development on the boards is Related and Oxford Properties’ Hudson Yards, being part of an enormous mixed-use project including office towers, hotel, residential and cultural venue. Hudson Yard’s
1 million-square-foot retail component will be anchored by a 250,000-square-foot Neiman Marcus, which will sit above four floors of retail and restaurants. The retail mix will include luxury, bridge and fast fashion brands, along with a number of restaurant concepts by well-known chefs such as Thomas Keller, Jose Andres, and Costas Spiliatis. It will be Neiman’s first and likely only New York City store. The retail mix will include luxury, contemporary and some fast fashion. The retail is slated for a fall 2018 opening.
Across from Hudson Yards on 10th Avenue, Brookfield is underway with an office tower that will also include approximately 200,000 square feet of retail. Whole Foods has announced a 60,000-square-foot lease here, which will add a much-needed amenity to this burgeoning office and high-end residential community. Brookfield is also looking for unique restaurant and nightlife tenants to amenitize this project, which is slated to open in 2019.
Further north, two projects are under construction, which will add new retailers and high-quality multi-level retail space. Luxury condominium developer Gary Barnett is underway with the construction of Nordstrom Tower on Broadway between 57th and 58th Streets, a block south of The Shops at Columbus Circle. Nordstrom is under construction on its 363,000-square-foot flagship at the base of this tower, and will also open a free-standing men’s store across the street in approximately 43,000 square feet. The stores are slated to open in spring 2019.
— By Stephen Stephanou, Principal, Crown Retail Services. This article first appeared in the March/April 2017 issue of Northeast Real Estate Business magazine.