"Retail defines all neighborhoods," explained Ed Hogan, national director of retail at Brookfield Properties. "We are seeing retail starting to impact 24/7 on the environment of Lower Manhattan." He added that Brookfield has seen a similar reaction in Downtown Los Angeles. "Once residential grows, retail comes in and feeds itself."
Hogan's comments, which came at a program aimed at neighborhood trends hosted by ICSC New York Next Generation, were echoed by Darrell Rubens, managing director at Winick Realty Group. With restaurants and cafes open late and on weekends, young people are flocking to the area, he said, and "once they started to go down the demographics really changed."
Marc Shulman, director of site acquisition at Raymour & Flanigan, likens the situation to an age-old question. "You need retail infrastructure in place or you can't have a 24/7 environment,' he said. "It's sort of the chicken and the egg. People won't go where retail isn't and retail won't go where people aren't."
In addition to bringing people, retail defines a neighborhood, adds Joe Chan, president of the Downtown Brooklyn Partnership. "Retail drives the perception of the neighborhood. It also plays a critical role in driving the life of a neighborhood," he explained.
In Lower Manhattan, property owners not only had to convince retailers that the area would rebound, but they had to convince retailers how fast it could happen, Hogan said. Brookfield Properties is the largest property owner in Lower Manhattan, with the deed to World Financial Center in its pocket. "It takes just that much longer to do a deal," he added. "They don't happen as quickly as they did before 9/11."
But maybe all neighborhoods need is one retailer to start the ball rolling--like BMW taking space on Wall Street. "Signing BMW at 67 Wall St. really changed Wall Street," Rubens explained. Before that lease, retail rents were under $100 per foot on Wall Street; however, as soon as BMW inked a deal, other retailers started realizing the benefit of having a Wall Street address and being near BMW. Rents hit $200 per foot after the deal, and are now going as high as $500 per foot on the world-famous street, Rubens said."Every time another premiere retailer comes Downtown it causes a few others to look Downtown," Hogan said, adding Lower Manhattan is the third largest CBD in the nation and the most underserved retail market.
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