Nordstrom doesn’t want to be left out of the retail resurgence of Lower Manhattan.
This story first appeared in the October 2, 2014 issue of WWD. Subscribe Today.
The Seattle-based retailer is said to be looking for space to open a full-line store downtown. Nordstrom in June 2012 revealed plans for its first full-line store in New York City, a 280,000-square-foot flagship, to open in 2018 at the base of a future skyscraper on the north side of 57th Street between Broadway and Seventh Avenue.
A real estate source said Nordstrom is looking for about 250,000 square feet of space downtown. If Nordstrom does find a site, the downtown store won’t necessarily open before the uptown store, the source said.
The available locations in Lower Manhattan with enough square footage to house a full-line Nordstrom unit can be counted on one hand. “Brookfield doesn’t have space and Westfield World Trade Center isn’t configured for a department store,” the real estate source said. Westfield’s centerpiece is the Oculus, a dramatic design by Santiago Calatrava. It rises 150 feet at the highest point of the ceiling and is formed by a series of riblike structures that cover part of the store facades. There are also several imposing two-story, street-level spaces for flagships, with up to 8,000 square feet of space each, that have unobstructed facades.
Lower Manhattan asking rents soared 37.8 percent in the second quarter this year, faster than any other section of the borough, according to a report by Cushman & Wakefield. Average asking rents for ground-floor space in Lower Manhattan, defined by Cushman & Wakefield as extending from Chambers Street to the tip of the island, averaged $346 a square foot in the second quarter of 2014, compared with $251 in the same quarter a year ago.
Another real estate source said Nordstrom has been looking at 1 Wall Street, an Art Deco skyscraper, owned by developer Harry Macklowe. “It’s away from where most of the luxury retailers are landing,” he said.
The old American Stock Exchange at 78 Trinity Place “is very intriguing as a development site,” said a retail expert. “It has loading access and all the things a major retailer would look for. The post office on Church Street between Vesey Street and Barclay Street could be interesting, but that could be a decade off,” he said, referring to whether the cash-strapped post office would sell the building to raise money.
“Nordstrom has been interested in Lower Manhattan for quite some time, the problem is finding the amount of square footage they need.”
Another possibility is 23 Wall Street. Its location is complicated by the fact that it’s across from the New York Stock Exchange. The building, which has 250,000 square feet of space, has poor loading facilities as it’s hemmed in by barricades and a residential building that partially surrounds it. “It’s a brilliant, multilevel, huge building that’s already gutted,” a real estate source said. “Donna Karan presented her fall collection in the building.”
Howard Hughes Corporation may be trying to secure Nordstrom for Pier 17 at the South Street Seaport, which it’s redeveloping. According to Hughes, the “plan includes the complete renovation of Pier 17, including enhanced and increased open space on the pier as well as the building’s roof, and retail space filled with destination stores, restaurants and neighborhood shops.” Howard Hughes is reportedly trying to get Nordstrom for its Summerlin project in Las Vegas and may be talking to the retailer about the Seaport.
Another real estate source said that perhaps Nordstrom is looking at “something that’s not so obvious. It could be a development site that hasn’t come to fruition yet.”
Nordstrom did not return calls seeking comment.
There has been a rush of retailers downtown, which are eager to take advantage of the consumer traffic in the area and the surge of new developments. Brookfield Place, at 225 Liberty Street, last week revealed that Saks Fifth Avenue had signed a lease for an 85,000-square-foot full-line store, as well as an Off Fifth unit. Brookfield Place will open in the spring with luxury retailers such as Hermès, Ferragamo, Michael Kors, Ermenegildo Zegna and Scoop. Westfield World Trade Center, a major retail project, has yet to weigh in with its tenant roster.
Retailers aren’t only heading downtown — they’re going to new, untested neighborhoods. Neiman Marcus Group last month said it would open its first store in New York City at Hudson Yards in 2018. The development, on the far West Side of Manhattan, is envisioned as a city-within-a-city by developer Related Cos.
Lower Manhattan is more of a known quantity. “We are having a complete retail revolution in Lower Manhattan,” said Jessica Lappin, president for the Alliance of Downtown New York. Lappin said more than 60,000 people live in the area and 310,000 work there, with 11.5 million tourists visiting lower Manhattan before Hurricane Sandy. “We have an estimated $5.2 billion in annual purchasing power in Lower Manhattan,” she said.