Dolce Vita, the footwear brand acquired by Steve Madden in 2014, has leased an entire 10,000-square-foot, four-story building at 53 Mercer Street in SoHo for a showroom, offices and 4,900-square-foot bi-level store with about 2,500 square feet on each of the ground and lower levels.
According to retail brokers the level of leasing in SoHo lately has been somewhat sluggish.
“It’s a fairly big deal for SoHo at the moment,” said Dan Harroch, the Thor Retail Advisors broker who represented the landlord in the Dolce Vita deal. Mark Neuman, a broker at Helmsley Spear, represented Dolce Vita.
“The activity has been stagnant,” said Harroch.“Rents have softened and landlords are more receptive to lower offers. They will be more creative with concession packages. It may seem that pricing hasn’t really changed, but we are being more aggressive.
“Nike was the last big deal in SoHo,” Harroch said, referring to 529 Broadway where the activewear giant a year ago leased a five-story, 52,500-square-foot building under development at 529 Broadway for a reported $1,200 per square foot.
But what a difference a year makes. With about 25 vacancies on Broadway in SoHo, some landlords have shown a willingness to negotiate. Some landlords will agree to reduce asking prices by 10 percent, while others may deduct as much as 20 percent to 25 percent, depending on the owner and how leveraged the property is.
However, it’s not as if there’s no movement at all in SoHo. Zadig & Voltaire is relocating to Broome Street and Marissa Webb recently opened on Grand Street near Alexander Wang.
Meanwhile, Ted Baker is leaving Grand Street and setting up shop on Wooster Street.
“Mercer Street has high-end and luxury brands. As you move south, the rents are lower and you have more contemporary labels,” Harroch said.
Rents on Mercer Street are in the range of $450 to $600 per square foot, Harroch said. He did not disclose the rent Dolce Vita is paying, but indicated it is lower.
“It’s been a challenge for many retailers to be profitable,” Harroch said.
Everlane went the pop-up shop route at 65 Prince Street from June 28 to July 1. “They are trying to negotiate an option to extend the shop,” Harroch said. Leesa, an online bedding company, that wanted a physical presence so consumers could touch and feel its products, did a month lease and then extended it for three more months.
“I have clients looking for 10-year leases, but they want the right to get out of it should they need to,” Harroch said. “People are looking for security more than ever.
“People moving further south of spring,” Harroch said. “For some products, $450 per square foot to $600 per square foot in rent would not make sense.
“There are a few tenants that are interested in SoHo and have been looking at SoHo for quite some time,” he said.
“Right now people are waiting to see who is going to pull the trigger first. It’s a tenant’s market.”