Much of Manhattan retail real estate has proven to be surprisingly resilient despite 9/11 and the recession. Average asking rents rose 12 percent throughout the city for stores of 1,000 square feet or less. Available space declined by 19 percent, or 2.7 million square feet, according to the Real Estate Board of New York’s Spring 2004 Retail Report, which provided the data for this list. The neighborhoods with the biggest rent increases are those with high foot traffic and plenty of tourists. Times Square, West 34th Street, 57th Street and Fifth Avenue all fit the bill.
- 34TH STREET: BETWEEN FIFTH AND SEVENTH AVENUES
83.2 percent 2004 asking price: $262; 2003 asking price: $143
With more than 100 million people passing through the four corners of 34th Street and Broadway annually, many chains, including Gap, have their highest-volume flagships on the street. Zales, Forever 21, American Eagle Outfitters and Famous Footwear are opening stores on the thoroughfare, Herald Center is getting a facelift and Manhattan Mall is attracting tenants such as Aeropostale and Charlotte Russe.
- 57TH STREET: BETWEEN FIFTH AND PARK AVENUES
54.8 percent 2004 asking price: $850; 2003 asking price: $549
East 57th Street continues to command some of the highest retail rents in Manhattan. In the past year, activity on the street has included the opening of an 11-story Louis Vuitton flagship, the biggest in the world, as well as the debuts of boutiques for Christian Dior Homme, Yves Saint Laurent Rive Gauche and Furla.
- TIMES SQUARE: SEVENTH AVENUE, BETWEEN 42ND AND 47TH STREETS
30.2 percent 2004 asking price: $271; 2003 asking price: $208
Times Square has been buffed and shined to a gloss. The stretch of Seventh Avenue in the heart of the theater district is not for the meek. Restaurants such as Bubba-Gump Shrimp and Paramount Cafe cater to big appetites. Stores such as R.A.G., Sunglass Hut, Watch World and Perfumania ply the tourist trade. It’s no surprise the vacant One Times Square — formerly the Warner Brothers Studio Store — is being marketed as a retail and branding opportunity.
- TIMES SQUARE: BROADWAY, BETWEEN 42ND AND 47TH STREETS
22.8 percent 2004 asking price: $398; 2003 asking price: $324
Broadway’s theaters are dependent on tourists, and tourists need places to eat and shop. ESPN Zone, Planet Hollywood, Sephora, Footlocker, the Virgin Mega Store and Toys ‘R’ Us with its giant Ferris wheel and T. Rex have turned Broadway into the theme park-like attraction they crave. With more than 250,000 people passing through Times Square subway stations every day, the area has one of the highest pedestrian counts in the city.
- FIFTH AVENUE: BETWEEN 49TH AND 59TH STREETS
10.9 percent 2004 asking price: $717; 2003 asking price: $646
The most desirable stretch of Fifth Avenue keeps changing. In the Eighties, there were entertainment retailers and electronics stores having permanent going-out-of-business sales. They’re both gone now. Luxury nameplates have always staked a claim to Fifth Avenue and now have the biggest presence, but there are also brands with wider appeal. In addition to Gap and Mexx, Zara will open a flagship in the former Façonnable store on the corner of Fifth Avenue and 54th Street.
- MADISON AVENUE: BETWEEN 57TH AND 67TH STREETS
3.7 percent 2004 asking price: $701; 2003 asking price: $676
Global brands with flagships on Fifth Avenue or 57th Street, such as Chanel and Gucci, view Madison Avenue as a different market — the neighborhood is a stomping ground for wealthy New Yorkers — and have opened second and third units there. Louis Vuitton has the same idea. There are fewer “For Rent” signs than last year. New stores include boutiques for Judith Leiber and Jimmy Choo.
- TIMES SQUARE: 42ND STREET, BETWEEN SIXTH AND SEVENTH AVENUES
1.2 percent 2004 asking price: $169; 2003 asking price: $167
42nd Street, which was synonymous with crime and prostitution, has become a family destination. In place of peep shows, there’s good wholesome entertainment at venues such as Disney’s New Amsterdam Theater, The New Victory Theater for children and Madame Tussaud’s. Retailers such as Gap, Sanrio’s Hello Kitty store and Quiksilver take advantage of the 1.7 million people passing through the area each day.
- BROADWAY: BETWEEN 72ND AND 86TH STREETS
-0.83 percent 2004 asking price: $238; 2003 asking price: $240
There’s always a pioneer. In the Seventies and Eighties, Charivari, the edgy fashion emporium, led the way to the Upper West Side, but succumbed to bankruptcy in 1997. Barneys Co-op, which has had its own share of woes, is now opening a store on Broadway and 75th Street. It will be the most upscale store in the area with neighbors such as Papyrus, Body Shop and Health Nuts. But if things go well, expect other apparel retailers to follow.
- SOHO: BROADWAY, BETWEEN HOUSTON AND BROOME STREETS
-1.8 percent 2004 asking price: $162; 2003 asking price $165
The opening of Bloomingdale’s has given Broadway a shot of adrenaline and the traffic is spilling over to other parts of SoHo. The area is attracting new names such as Japanese import Bathing Ape, West Coast players American Apparel and LF and Netherlands-based G Star Raw. The Elie Tahari Co. is marking its return to retail with a store in SoHo, and Lynn Cohen, who owned Rue de Reves on West Broadway in the Eighties, is back with a store called Runway.
- THIRD AVENUE: BETWEEN 60TH AND 72ND STREETS
-3.5 percent 2004 asking price: $193; 2003 asking price: $200
The roster of stores on Third Avenue, between 60th and 72nd Streets, reads like a mall directory with national brands such as Ann Taylor Loft, Gap, Club Monaco, Banana Republic and Starbucks. Above 72nd Street, it’s a different story. Independent chains such as L’Occitane, Molton Brown, Kate’s Paperie and Scoop have taken root on the upper stretch of Third Avenue.
- TRIBECA: HUDSON STREET, BETWEEN CHAMBER AND CANAL STREETS
-10 percent 2004 asking price: $54; 2003 asking price: $60
The TriBeCa Grand Hotel heralded the neighborhood’s arrival. It’s become a nexus for home furnishings shops and art galleries, many of which fled SoHo’s prerecession rent increases. The Issey Miyake outpost on Hudson Street is a destination for the designer’s fans, and restaurants such as Nobu bring the uptown crowd downtown. TriBeCa landlords are now competing with the more populous SoHo, where rents have dropped.
- DOWNTOWN: BROADWAY, BETWEEN BATTERY PARK AND CHAMBERS STREET
-10 percent 2004 asking price: $54; 2003 asking price: $60
The partnership of government agencies and the private sector has accelerated the recovery of downtown Manhattan. Luxe hotels such as The Regent Wall Street, Ritz-Carlton in Battery Park City and new Millennium Hotel bode well for the future and residential development is on the rise. The new World Trade Center will have about 650,000 square feet devoted to retail space and could be anchored by a department store.
- FLATIRON: FIFTH AVENUE, BETWEEN 14TH AND 23RD STREETS
-12.7 percent 2004 asking price: $137; 2003 asking price: $157
Since the Flatiron district began attracting fashion companies in the late Eighties, it’s become an urban mall with the added attractions of great restaurants and a Greenmarket. Esprit, which will take over the Emporio Armani space, will join Anthropologie, Club Monaco, Eileen Fisher, Kenneth Cole, J. Crew, Banana Republic and Daffy’s. Activity is also heating up in Union Square, where Mexx opened a unit.
AVERAGE MANHATTAN RETAIL RENTS BY STORE SIZE
12 percent 2004 asking price for 1,000 square feet and under: $155 per square foot; 2003 asking price for 1,000 square feet and under: $138 per square foot.
SOURCE: THE REAL ESTATE BOARD OF NEW YORK, SPRING 2004 RETAIL REPORT *signifies a tie