Canal Street primed for retail transformation
By Al Barbarino
Canal Street has become synonymous with the sale of cheap, knockoff goods, jewelry and electronics.
The street bustles with tourists and locals who navigate its maze of open storefronts and street vendors.
But some retail experts predict – and hope – that an imminent shift in retail demographics will cause a new kind of bustle on Canal Street, as higher-end retailers move in.
“Canal Street is a fantastic shopping street,” said Ben Fox, EVP of retail leasing at Massey Knakal. “It’s got tons of pedestrian traffic and tourists. Disposable income is walking around everywhere. But it’s about time things started to change because there’s a dire need for mainstream retail on Canal Street.”
Recent activity on Canal Street indicates that the change is in motion, as old, low-rent leases expire, landlords look to raise rents and move higher-end retailers in, and retailers consider space beyond surrounding areas, where prices have increased astronomically.
“A lot of the rents on streets like Broadway in SoHo have became insane and are being replaced by national chains,” Fox said. “Canal Street is absolutely prime, with throngs of people and an office population to the south that has few shopping options.”
The street touches SoHo, Tribeca, Chinatown, Little Italy, Hudson Square and the Lower East Side, and it’s something of a transportation hub, with 11 different subway lines that draw people from all over the city.
“It’s an apex for all of these neighborhoods, which makes it a natural hub to bring in new retailers,” said Melinda Miller, an associate at Winick Realty who is leading the marketing efforts at 272-274 Canal Street, a four-story property with 1,800 s/f per floor.
“Canal Street is one of those streets where you go and see the black market and it only seems natural that change will take place,” Miller said. “It only a matter of time,” she said.
Miller, on behalf of the Gindi family, which owns retail property throughout the city, is asking $800,000 per year for the lease to the property.
Plans are in place to install a new glass façade on the building, which is situated next to the newly-constructed Tribeca Blu Hotel and features 57 feet of Canal Street frontage, which is mostly unheard of on Canal Street.
“The early bird will truly get the worm,” Miller said. “It will take a forward-thinking retailer who shares our excitement for the neighborhood to be a pioneer on this street.”
Miller suggested that the space would suit a flagship location for a coffee shop or a bakery, like Panera Bread for instance, with outdoor space on the ground floor and additional seating on the upper floors. Anything is possible for a retailer with “imagination and vision,” she said.
Winick’s efforts come on the heels of news last week that discount clothing store Necessary Clothing signed a lease for 6,500 s/f of space at 261-263 Canal Street, between Centre Street and West Broadway.
Both Fox and Miller pointed to the lease as evidence that change is underway.
“Finding good available space has been impossible up until now,” Fox said, adding that the ability of landlords to move out low-paying tenants and raise rents to market will bring a variety of well-known national retailers, from office supply stores like Staples, to shoe stores and health clubs.
“This will be terrific for the street,” Fox said.
But Fox believes it will be 10 years before the full transformation is complete, and neither Fox nor Miller think that Canal Street will become a destination for the ultra high-end stores whose products are currently emulated up and down the street.
“If I’m a high-end retailer I’m going to be a bit apprehensive, so I don’t feel it will be high-end, but more of a unique street that will offer an eclectic mix,” Miller said.
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