Commercial Real Estate & Advisory

SoHo Retail Buds Anew With Bloomie’s

By Alan J. Wax | November 11, 2002

Manhattan’s super-chic SoHo retail district after the World Trade Center attack, attraction to retailers. Key factors behind the leasing revival are lower rents in the trendy area and continued strong foot traffic in the lower Broadway corridor, retail-leasing brokers said.
Heading the list of new tenants is Bloomingdale’s, which has signed a 49-year lease for the entire 124,000 square-foot space at 504 Broadway, currently the flagship of Canal Jeans, which is going out of business.

“If anything, this will help all of SoHo. There will be an anchor there,” said Newmark New Spectrum executive vice president Elliot Resnick. Resnick, along with Robert Pressman, now of Cushman & Wakefield Inc., represented Bloomingdale’s new landlord, 504 Broadway Realty LLC, in the deal announced last month. “I think is a wonderful turn for SoHo…I feel optimistic,” said Faith Hope Consolo, vice chairman of Garrick-Aug Store Leasing Inc. “It’s a possitive reinforcement of an era that’s had a whole lot of bad press. Things aren’t as bad as people think.”

Brokers noted that Bloomingdale’s new location opens up the neighborhood’s southern portion, which many mainstream retailers had shunned. “This will take a big step toward legitimizing that block, ” said Bruce Sinder president of Sinvin Realty, which has its offices in SoHo. Bloomingdale’s lease followes moves by Levi’s, Crate & Barrel and H & M.

In the months immediately after Sept. 11, 2001, attack, tourists and out-of-town customers all but disapeared and sales slumped in the area. Some retailers closed their doors.

“I see that starting to turn around,” Sinder said. “Each week there are more people out there shopping. Weekends are getting busier.”
To be sure, the lower Broadway area always has had strong traffic that includes a broad cross section of customers. Side-streets retailers, home largely to fashion retailers, had been less fortunate, broker said.

Now, these side streets, among them Mercer, Greene and Wooster, “offer the best value,” said Robert Cohen, executive vice president of Robert K. Futterman & Associates, who recently brokered leases in the area for Sharper Image, the grown-ups’ toy store, inked a 10-year lease for 2,500 square at 98 Greene St. and adidas Originals, a new concept store operated by the footwear maker, opened in 3,700 square feet at 134-136 Wooster St. Agent Provocateur, a retailer of designer lingerie, moved into 2,200 square feet at 133 Mercer St.
The downturn in traffic has caused some landlords to rethink rents, whcih had been climbing before Sept. 11 as tony retailers, among them Chanel, Cartier, Louis Vuitton and Salvatore Ferragamo, sought stores in a neighborhood known as a home to artists and galleries.

“It made the landlords get realistic on what rents can be gotten for that neighborhood, ” Consolo said.

Now, rents are down to $250 per square foot from $400 to $500 before last year’s attack, she said.

Manhattan’s East 57th Street at Madison Avenue, by comparison, has the highest retail rents in the world at $700 per square foot, according to an annual survey by Cushman & Wakefield Inc.

“There are plenty of retailers willing to take advantage of [lower SoHo rentals],” Cohen said. “There is still a lot of business to be done down there.”