Commercial Real Estate & Advisory
Commercial Real Estate & Advisory
Long after its purported demise, SoHo is not only alive and well but is thriving as a mixed retail environment.
Sure, September 11 knocked the wind out of its sales and rents, but that was true of the entire city. SoHo simply suffered more than other areas as tourists and locales cocooned at home.
The defining moments for its rebirth, experts agree, came with Bloomingdale’s decision to move forward after September 11 and sign a lease in the fall of 2001.
“It gave an optimism that this part of Manhattan was back,” said Faith Hope Consolo, Chairman, Retail Leasing and Sales Division of Prudential Douglas Elliman.
Since its inception in the late 1970’s, SoHo has been largely anchorless. The 1990’s saw it transformed into a mishmash of stores that took over spaces form priced-out galleries.
Robert Pressman of Studley, Bloomie’s broker, said: “At 125,000 square feet, it is the only large store. It basically anchored Broadway and created a shopping center community atmosphere. Now there is a rebalancing.”
The high-end luxury retailers, like Mont Blanca and Coach, have since been joined by a broader mix of make-up, fashion, and furnishings tenants, creating what all concur is a healthier retail environment.
And while rents skyrocketed before September 11 and then dropped precipitously, they are now resurging.
Consolo says newer leases are being signed at re-adjusted, “realistic” numbers in the high $200s – a foot down from the unsustainable $400s.
New tenants are opening and current tenants are no longer complaining, Consolo added.
Some of the side street stores have made deals in the low $100s a foot, noted Christopher Owles, managing director of Sinvin Realty.
“If you do the SoHo circle from Houston down Broadway and West Broadway, there are good, interesting shops. They are not all filled in but they are coming.” Said Owles.
For instance, Adidas Originals opened on an otherwise quiet section of Wooster Street and is doing great business, as is the large black Adidas store that just opened in May at 610 Broadway on the north side of Houston Street, technically NoHo.
Bloomingdale’s has influenced the expansion of retail as well as the rents south along Broadway.
“Below Spring wasn’t so good but now it’s strong between Spring and Broome,” said Laura Pomerantz, a principal of PBS Realty Advisors.
Further south, at 40 Mercer, which borders both Broadway and Grand Streets, hotelier Andre Balazs and Hines are creating a luxury residential project designed by Jean Nouvel SP.
Project retail broker Robert K. Futterman, who heads his eponymous nationwide company, said it will have 10,000 to 20,000 square feet of retail on two levels.
Balazs is also creating an entirely ground up 11-story residential project dubbed One Kenmare Square at 210 Lafayette Street. This sits on the westerly edge of Soho over looking Nolita between Spring and Broome and behind the west side of Bloomies on Crosby Street.
SoHo retail and art specialist, Susan Penzner of Susan Penzner Real Estate said: “Retailers still consider SoHo a location for branding, but the art galleries are now upstairs.”
Additionally, new property owners and managers are pushing SoHo’s buttons to make doing business easier.
When 350 W. Broadway was developed 15 years ago, to avoid prohibitions against certain first floor uses, the owner used steps and did away with the first floor designation. The space remained vacant.
The new net-lessee, the Lighthouse Group, obtained a variance and is re-developing the building into an extraordinary new retail environment.
Owles says it will create a connection between the Soho Grand hotel to the south and the high-end retailers north of Broome.
It will open soon with two 8,000 foot floors plus a basement and an asking rent of $175 a foot for the ground and $60 for the second floor.
The operators are also seeking to create a residential project above.
“SoHo is also pushing towards its edges,” noted Owles.
Whenever the economy is weaker, Owles says, the retail becomes centered along Prince, West Broadway, Spring and Broadway which are the three busiest streets.
“They are timeless and there are occasionally vacancies, but they are a very stable part of the market,” said Owles.
One of those edges is the continued march down the wide Broadway corridor.
“A lot of retailers who can’t afford to be on Broadway in SoHo are recognizing that Broadway is drawing tourists south of Canal Street as well as the shoppers and TriBeCa, SoHo and new City Hall residents,” said Victor Menkin, president of Menkin realty Services, who is representing building at 408 Broadway a mere 80 feet south of Canal.
This could turn into a 50,000 square-foot retail play, Menkin said. Street level rents in this section run from $85 to $125 a foot.
“As the Financial District and the City Hall areas are evolving, that corridor is also coming into its own,” added Menkin.