Not only has the retail apocalypse caused by the pandemic passed, Manhattan has rebounded so fast that prime locations are becoming hard to find.
“Retail is on fire,” said Eric Le Goff of Retail by Mona. “From Meatpacking to Williamsburg, all these areas are on fire.”
In recent years, rents on upper Madison Avenue between 59th Street and 86th Street had fallen into the $600s per foot. Now, a bevy of 75 transactions have pushed rents back toward $1,000 per foot.
The most recent lease was with Dolce & Gabbana which snagged a 23,338-square-foot former Hermès women’s store at 693 Madison Ave. after the other retailer moved down the block to the larger 706 Madison Ave. last year.
Additionally, Sotheby’s will take over the former Whitney Museum in the Breuer building at 945 Madison, adding new life to that stretch.
“There is a reduced amount of inventory,” said Matthew Krell of Alvarez & Marsal Property Advisors.
Both Madison and Fifth avenues are going through many store changes.
The opening of Tiffany & Co.’s redevelopment will allow its sister LVMH brand, Louis Vuitton, to move into the former Nike space to its east that Tiffany had occupied during its renovation.
Louis Vuitton will develop a new tower at 1 E. 57th St. and engulf 743 Fifth Ave., now occupied by brand cousin Hublot, sending it into the market to seek a new spot.
Gucci has renewed its large store on the Fifth Avenue base of Trump Tower. Swarovski is opening soon at 680 Fifth. Rolex is building its own tower at 665 Fifth Ave., while Marc Jacobs will take over the former Armani X on the north corner of East 51 Street at 645 Fifth Ave.
The area closer to 42nd Street is lagging, however, due to numerous big-box storefronts.
One problem for the entire retail market is that it takes so long to get deals done.
“You may have an agreed-upon term sheet, but you are not getting someone swinging hammers for a year,” said Matthew Chmielecki of CBRE. “The least scientific way to measure a market is to count empty storefronts.”
For instance, a new 10,000-square-foot deal in the base of the Virgin Hotel will bring Electric Shuffleboard to the city next spring.
John Few, of SRS Real Estate Partners, represented the concept.
“It has a very well-thought-out food and beverage program and will be good for dates and corporate events,” said Adam Weinblatt of Newmark who, along with Richard Tang of the Lam Group, represented the hotel, which has already scored a winner with Swingers minigolf.
In Noho, the 32,400-square-foot former Showfields space on Lafayette Street is up for grabs with Retail by Mona. Its asking rent is $3.5 million.
Across Lafayette, hip sneaker company Kith expanded into a big footprint.
“It’s madness with tons of people,” said Brandon Singer of Retail by Mona. “It’s like an upscale Times Square as it’s slammed and they’re not just looking, but shopping.”
On Broadway and on other Soho streets, many shops are preparing for their openings next spring while Meatpacking continues to see commitments by both luxury automakers and luxury retailers.
Saint Laurent, for instance, signed a 13,000-square-foot lease at 70 Gansevoort St., part of the Aurora Capital Associates and William Gottlieb Real Estate street revival.
“It’s full of energy and that neighborhood has transformed over the last five years,” said Adam Henick of Current Real Estate. “Gansevoort Row is beautiful with busy restaurants and popular retailers.”
However, Times Square is still suffering despite lots of foot traffic.
“Not only have some of the large boxes sat vacant because it’s hard to find the right user, but the challenges the city has undergone the last few years have not helped,” said Henick.
The 245,000-square-foot retail in the base of the former New York Times building is in receivership, although the huge Bowlmor on West 44th St. is open, as is Los Tacos No. 1.
“Larger tenants are looking at it,” said Chmielecki, the agent for the block. “It’s hard to overstate the excitement in the retail market.”