NEW YORK CITY—Retail sales nationally may be lagging but local developers and brokers in the sector, for the most part, seemed optimistic about the future Thursday in Midtown during the NYU Schack Institute of Real Estate 48th annual conference on capital markets in real estate.
"There's general concern but we're not down on New York," stated Richard Johnson, head of real estate-Americas, Kering. "Long term, fundamentally, we need to be here."
Analyzing the good and the bad, Haim Chera, principal, Crown Acquisitions added, "We're big believers in the upper 5th avenue corridor, there's still strength in that market. And in Times Square, retailers are paying $1,000 a foot and everyone's comfortable even saying $2000 a foot. Those two areas are the stalwarts."
He continued, "Soho has had its ups and downs; Broadway is oversupplied, there are four or five spots chasing retailers. Prince and Spring streets have had some success but they're supply constrained."
Chera suggested that the Herald Square market is under rated. "Where else do you have an anchor tenant doing $1 billion in sales annually?" Lastly, he said, "We're bullish on the World Trade Center area, that area's best days are ahead."
A retail developer in that area, David Ruddick, EVP, project leasing, Westfield Corp., noted, "There are a number of submarkets downtown. There are over 450,000 people working south of Chambers Street and they spend $2.1 billion on retail sales. For tourists, the World Trade Center is an essential stop. Early numbers from the museum and monument are strong. We expect the World Trade Center to be the number one shopping location on the planet from day one, which will happen at the end of the first quarter."
Retail guru Laura Pomerantz, vice chairman, head of strategic accounts, Cushman & Wakefield, is similarly bullish on Lower Manhattan. "The number of families downtown is expected to grow to 70,000. The area really is a city within a city."
Plus, she added, "New retail trends are in the area. There are food halls, with Brookfield Place and the upcoming Eataly—that creates not just a shopping destination but a lifestyle and a meeting place that keeps people there."
Pomerantz continued, "Because of the Fulton street train station, there's a Gap, Urban Outfiters, Anthropologie has signed a lease .the street retail is becoming more valuable. They're feeding off of each other and growing the customer base."
The sector experts' positive views aren't marred by online shopping either.
"For luxury retailers, it's about the experience so they will always have stores," observes Johnson. "They present a great opportunity for repairs, and then engaging with that company. It's not brick-and-mortar versus the Internet, it's finding a way to merge the two."
Adds Pomerantz, "The effect could be waning; 90% of retail sales still happen in brick and mortar stores. Retail isn't just about buying stuff, it's the experience. It's been entertainment in the US for some time, a and that's not changing."
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
