Manhattan Retail MarketView Q2 2014 CBRE Global Research and Consulting U.S. CONSUMER CONFIDENCE NYC JOB COUNT U.S. JOBS ADDED NYC PRIVATE SECTOR EMPLOYMENT (JUN ’14) 85.2 (JUN ’14) 20,700 (JUN ’14) 288,000 (MAY 2013-MAY 2014) 2.3% Market Overview Retail News In June, U.S. employers added 288,000 store with a location in Chelsea, will open jobs, marking the fifth consecutive its second Manhattan store at 26 Greene • Thor Equities is under contract to month when more than 200,000 jobs Street in SoHo. Likewise, Zimmerman, an acquire roughly 50,000 sq. ft. of retail were added.1 This drove down the Australian clothing and swimwear retailer at 530 Fifth Avenue for $595 million unemployment rate to 6.1%, the lowest with a location in SoHo, will open a store and recently closed on the purchase of reading since September 2008.2 The U.S. in the Meatpacking District. Additionally, 685 Fifth Avenue for $475 million. Consumer Confidence index reached 85.2 Italian men’s fashion retailer Caruso will in June, its highest since January 2008.3 open its first U.S. store at 45 East 58th • J. Crew, Paul Smith and Posman Books Meanwhile, U.S. retail sales rose from April Street, an 11,000-sq.-ft. flagship in the recently signed leases at Brookfield to May by 0.3%, driven by sales of motor Plaza District. Place and will join tenants such as vehicles and home-improvement materials, Theory, Michael Kors, and Hermès, which typically surge in the spring.4 Swedish-based fast-fashion retailer H&M bringing the property to 85% leased. has an established presence throughout In May 2014, New York City’s private the borough. This fast-growing retailer • Samson Management purchased two sector employment rate posted a year- accounts for some of New York City’s retail condos for $35 million at 451 over-year increase of 2.3%.5 Between April largest leases, with 42,000 sq. ft. at 4 Lexington Avenue, where TD Bank and May 2014, the job count increased Times Square, 57,000 sq. ft. at 589 Fifth and GRK, a Mediterranean chain to 20,700, with the leisure and hospitality Avenue and, most recently, 63,000 sq. restaurant, will each occupy a ground- sector experiencing the most significant ft. at Herald Center. H&M’s signage at floor unit. growth.6 The city’s unemployment rate 4 Times Square has become part of the from April to May remained unchanged at Manhattan skyline, a testament to the • Cooper Investors Inc. recently sold 7.9%, a 0.9% decrease from the previous brand’s ubiquity. The firm will expand its a three-level, corner retail condo at May.7 position in Manhattan through the opening 377 Broadway for $10 million. The of its sister label, & Other Stories, which 15,000-sq.-ft. space located in TriBeCa Manhattan continues to prevail as a global signed for a space at 575 Broadway in features 9,600 sq. ft. on the lower level, retail hub, with an increasing number SoHo, while COS, H&M’s high-fashion 4,500 sq. ft. on the ground floor and of international tenants opening in the brand, is slated to open this fall in SoHo 1,200 sq. ft. on the mezzanine. market. Lazzoni, a Turkish luxury furniture on Spring Street. 1 U.S. Department of Labor 4 U.S. Department of Commerce 7 New York State Department of Labor 2 U.S. Department of Labor 5 New York State Department of Labor 3 The Conference Board 6 New York State Department of Labor Figure 1: Notable Transactions - Q2 2014 Address Size (Sq. Ft.) Tenant Industry 575 Broadway 10,915 & Other Stories Apparel/Accessories 158 W. 27th Street 9,661 Peloton Interactive Gym 45 E. 58th Street 9,185 Caruso Apparel/ Accessories 499 Broadway 8,000 Brandy Melville Apparel/Accessories 875 Washington Street 1,250 Zimmerman Apparel/Accessories 202 Elizabeth Street 1,000 Coop & Spree Apparel /Accessories 273 Lafayette Street 900 Dita Eyewear Source: CBRE Retail Research Group, Q2 2014. © 2014, CBRE, Inc. FEATURED NEIGHBORHOOD SOHO Q2 2014 Previously an art district known for its As Broadway now caters to retailers like lofts and galleries, SoHo has slowly Express, Steve Madden and Desigual, been transformed into a mecca for luxury fashion tenants have increasingly boutique and fast-fashion retailers. The gravitated to streets that provide smaller Manhattan Retail | Manhattan Retail neighborhood’s appeal resides in its floor plates and a boutique feel. With capacity to provide a unique shopping limited availability on Spring Street and experience that attracts a high volume Prince Street—where average asking of international tourism as well as local rents range from $675 to $1,250— shoppers. Limited space availability, in tenants have begun searching for addition to retailers’ strong demand spaces along streets such as Greene MarketView to establish a storefront in the area, Street. WITH LIMITED may pose a challenge for prospective AVAILABILITY ON tenants, as some asking rents have Historically known for its upscale topped $1,500 per sq. ft. furniture stores, Greene Street is now SPRING STREET AND home to luxury retailers like Chloé, The presence of international retailers Dior Homme and Stella McCartney. Prince Street— and high-fashion tenants in SoHo The street provides an unparalleled WHERE AVERAGE continues to grow. In the past two boutique shopping experience among years, Balenciaga and Versace were cast-iron architecture and Belgian ASKING RENTS added to the roster of luxury tenants, block paving. In the last year alone, both opening stores on Mercer Street. the average asking rent increased RANGE FROM Frey Wille, a Vienna-based handcrafted from $200 per square foot to $500 $675 To $1,250— jeweler, opened a location at 122 per square foot. In particular, Greene Prince Street, its second in Manhattan. Street between Prince and Spring streets TENANTS HAVE French luxury brand Céline will be the has evolved into one of the more latest addition to the group, with a new desirable blocks for luxury retailers. BEGUN SEARCHING store opening on Wooster Street within Louis Vuitton set the tone with its lease FOR SPACES ALONG the next year. at 116 Greene Street ten years ago and recently expanded its store to open STREETS SUCH AS Broadway once contained the most an atelier. Tiffany & Co. has occupied attractive retail space in SoHo for high- 97 Greene Street since 2012 and GREENE STREET end international retailers. However, expanded into 106 Wooster Street in a today the corridor predominantly serves floor-through space that combines the as a location for mass-market retailers two locations. Fendi opened a pop-up that require larger floor plates. Tenants store at 122 Greene Street that will such as Lululemon Athletica, Gap, remain open through the 2014 holiday Zara and Topshop have each opened season. Most recently, MCM Handbags stores on Broadway, benefiting from signed on at 100 Greene Street, which the corridor’s heavy foot traffic. Brandy was formerly occupied by Jill Sanders. Melville recently doubled its store The presence of high-end retail tenants space by moving from 518 Broadway has made Greene Street a coveted to 8,000 sq. ft. at 499 Broadway. target for retail investment. Ground-floor asking rents on Broadway continued to rise this quarter, averaging $850 per sq. ft. between Houston and Broome streets. 2 Source: CBRE Retail Research Group, Q2 2014. © 2014, CBRE, Inc. SOHO Figure 2: SoHo WEST HOUSTON STREET Q2 2014 STARBUCKS DOS CAMINOS TRICO FIELD AROMA FLOS JAMBA JUICE AMERICAN EAGLE HOLLISTER POP BULTHAUP AVAILABLE AVEDA (2ND FLOOR) KEITO SHOES ARI AESTHETIC COSTUME R BY 45 RPM GALLERY CENTER AVAILABLE REALISM NATIONAL STUDIO DUANE READE LIGNE ROSET FOUNDATION BILLABONG PORSCHE MOROSO/ DOPDOP SALON SUNGLASS HUT AVAILABLE CAPPELLINI MERCER PARKING DESIGN POMEGRANATE MAHARAM (BELOW) Manhattan Retail | Manhattan Retail FAB GARAGE OMG AXELLE GALLERY CUTLER SALONS GALLERY MACLAREN MARC JACOBS KENNETH COLE CASSINA BABY DIOR HOMME PAUL SMITH MIRO CAFÉ FRENCH CORNER RESIDENTIAL VICTORIA’S CAPITOL ONE (2ND) SOHO WINE AND PARKING LOT MARNI STEPEVI B & B ITALIA SECRET PORTOFINO SUN SPIRITS LEASED DESIGUAL POP-UP STORE MARTIN LAWRENCE TO BE DOLCE & BANK OF EARTH ROOM TUI LIFESTYLE VERSACE RICKY’S NYC ART GALLERY FLOR GABBANA AMERICA LEICA KELLEY & PING REST VERA WANG & GROC. HUGO BOSS BROADWAY GOURMET POLTRONA FRAU ZADIG & VOLTAIRE UNDER ARMOUR DTR MODERN GALLERIES THINK PINK BLUE DOT VERSANI MARKET THE NORTH FACE KISAN ALESSI CONSTRUCTION VERIZON AVEDA MarketView AVAILABLE HAVEN AVAILABLE CAMPTON GALLERY WARBY PARKER ALDO SHOES OLSTEAD PROPERTIES BILLIONAIRE BOYS CLUB D.V.F. BALENCIAGA MEN THOMPSON ADIDAS AVAILABLE BALENCIAGA EXPRESS & EXPRESS MEN G-SHOCK ALCHEMISTS FRED PERRY ORIGINALS BAKED BY MELISSA BENEFIT PROENZA SCHOULER ZARA AVAILABLE FOREVER 21 TO BE & OTHER STORIES SPORT MAX PRADA BLISS (2ND FLOOR) COACH LOUIS K. MEISEL GALLERY UNO DE 50 FOLLI FOLLIE WINK LUCKY BRAND APPLE MICHAEL KORS J. CREW THE MERCER KITCHEN JF REY OPTICIANS CAMPER SABON CLUB MONACO OAKLEY RALPH LAUREN LURE RESTAURANT/BAR (DOWNSTAIRS) ARMANI A/X PRINCE STREET CHOBANI DEAN & DELUCA TUMI PINK BY FANELLI’S MANGO NARS MIU VICTORIA’S INTERMIX AESOP MIYAKE CAMPER MONCLER CONVERSE FRENCH CAFE NESPRESSO WOLFORD SECRET AVAILABLE FREY WILLE COLE HAAN HAPPY SOCKS FRAGMENTS OLIVE’S CAFE CONNECTION AGENT H&M TRUE RELIGION PROVOCATEUR MANGO ROBERT MARC MORRISON HOTEL BIRCHBOX FENDI POP-UP THE SCHOLASTIC STORE DAVID Z. TO BE DAVID YURMAN PLEATS PLEASE ISSEY A.P.C. MOLESKINE FRANKLIN BOWLES TO BE BARE MINERALS LOUIS VUITTON TO BE WOOLRICH JOURNELLE SEPHORA BANANA REPUBLIC VILEBREQUIN SCAVOLINI KITCHENS BCBG ANNA SUI STELLA MCCARTNEY HUGO BOSS ALEX & ANI BARBOUR TIBI ADRIANO MACKAGE