Commercial Real Estate & Advisory

West Broadway continues ‘second wind’ revitalization

By Lois Weiss | January 16, 2014

A series of leases and building buys along West Broadway in SoHo is putting the avenue back on the must-have map.

Once the darling of the art gallery and restaurant scene that created the original hip zeitgeist of Soho, West Broadway has lagged other area streets in both rents and façade upgrades.

Now a series of new building purchases, new retail leases, and high-priced condominium development is raising the area’s stock.

“The economy is strong and I think a lot of people are viewing it as an opportunity to have a great foothold in the market and reap the rewards,” said Christopher Owles of Sinvin Real Estate, who has been involved with, or is aware of, a number of transactions along West Broadway.

Luxury brands kicked off the side-street leasing trend on Mercer between Prince and Houston, with rents around $200 per square foot where they had once been in the $100 to $200 per foot range.

“Retailers took notice and quickly followed the pioneers like a herd of stampeding buffalo,” said Jared Epstein, Aurora Capital’s Vice President of Leasing and Acquisitions. Space is now scarce so rents have been driven north of $500 a foot on both Mercer and Greene Streets and well over $1,000 per foot on Prince and Spring Streets.

“West Broadway has finally begun its revival due to the fact that it is now the least expensive option in SoHo for retailers,” Esptein added.

Peter Hauspurg, chairman of Eastern Consolidated, agreed: “West Broadway appears to be gaining traction, as Greene Street has rents that have tripled in three years and Mercer between Houston and Prince begins to attract the highest end luxury tenants.”

“West Broadway is also a straight line south to the growing activity in FiDi,” said Faith Hope Consolo, chairman of Douglas Elliman Retail, who predicted a rise in rents and a swing by retailers onto West Broadway in 2011. “And when condos are selling above $20 million on the street, that does encourage high-end retail to locate there.”

Joseph Sitt’s Thor Equities is now in contract to buy the 2,150-square-foot 452 W. Broadway, near Prince, for $6 million. The 20-foot wide structure has a giant glass window that spans upwards over two stories. Thor is already marketing the retail space for a total of $800,000 per year or a blended $372 per foot.

Yogurt store Chobani is in the process of nearly doubling in size on the corner at 150 Prince, which also has a 436 W. Broadway address. In the same building, Moleskine leather and Aesop’s skin care line took small stores where Happy Socks and Robert Marc are already ensconced.

Town Residential leased space for a local office in No. 337, at the corner of Grand, which opened just a year ago. At the time, the asking rent in the building, repped by Owles, was about $200 per foot on the ground and $75 per foot for the second floor.

Max Studio’s lease is up in February at No. 426 and its 3,500 feet are being marketed through RKF with an asking rent of $300 per foot. La Perla relocated from Greene St. and Just Cavalli moved next door to 430-432, which has arched windows and a set-back upper floor. No. 415, which has a mix of upstairs offices and retail, sold over the summer for $41 million to Ralph Tawil’s Centurion Realty with ASB Capital.

DSquared2 has just leased No. 402, at Spring Street, where it will have 2,200 square feet on three levels. Owles of Sinvin Real Estate represented the ownership in this deal, which had an asking rent of $750 a foot. Last year, the Barolo Restaurant was booted from 396-398, clearing the way for Ladurée to lease No. 398, while Bonpoint grabbed No. 396.

Real Estate Equities Corp. purchased No. 375 last year for $81 million. Anthropologie is the retail tenant in about 11,000 square feet with 43,689 feet of offices available above it with an asking rent of $70 a foot through Jones Lang LaSalle.

The same owner of No. 402 and 396-398 has kept his prime No. 372 on the corner of Broome St. vacant since buying out Tommy Hilfiger. “They have been waiting for all these stores to be leased and open,” explained Owles, who is the agent. “It has four levels of legal SoHo selling space that is irreplaceable.” The asking rent is $1.75 million a year for the entire building and comes to a $150 per foot blended rent.

Early last year, the 11,115-square-foot retail space occupied by Treasure & Bond at No. 350 sold for $25.5 million through Jones Lang LaSalle to Eliot Spitzer’s family company. Cushman & Wakefield is currently marketing the space for rent.

In 2012 DDG Partners bought the four-building Tootsie Roll factory complex at No. 325 on the corner of Grand St. for $38.35 million where they are developing a new, nine-story condominium with retail space. The building also has Wooster St. frontage.

“The street is a puzzle and is finally starting to take shape,” Owles said.