Downtown retail taking off
Once upon a time, shopping in Lower Manhattan was almost synonymous with the always-packed bargain hunters’ mecca of Century 21.
But, like almost everything Downtown, the retail landscape is changing fast.
With new construction from the Financial District to the South Street Seaport, not to mention the new World Trade Center complex, Lower Manhattan is poised for a massive retail transformation.
Hundreds of thousands of square feet of shopping space is available for lease, and the upcoming International Council of Shopping Centers conference in New York is expected to bring with it a spate of lease announcements.
Speaking at a REBNY event last month, Robert Futterman, of RKF associates, said Westfield, the shopping center operator in charge of the 350,000 s/f of retail and dining space in the World Trade Center complex, has more than 20 deals out that they are yet to announce.
“Imagine the nicest airport shopping experience you’ve ever had in your life,” he said. “They’re going to hit it out of the park.”
The Westfield space will benefit from the traffic of office workers in the World Trade Center and neighboring buildings, local residents, as well as the visitors to the national September 11 Memorial. But the new wave of retail availability downtown is remarkable not only for its size, but its diversity. On the Hudson River side of the neighborhood, Brookfield Office Properties has invested $250 million renovating the retail and food court spaces at the base of Brookfield Place — formerly known as the World Financial Center.
“Our audience first and foremost is the downtown resident,” said Edward Hogan, Brookfield’s national director of retail leasing.
Overall, the Lower Manhattan residential population has grown from 23,000 in 2001 to approximately 60,000 today, according to Nicole La Russo, SVP of economic development and planning at the Downtown Alliance.
But downtown residents have tastes that differ from other well-heeled Manhattanites, according to Hogan.
“They’re younger, more cutting-edge than uptown, and they’re a completely underserved demographic,” he said.
So far, the Brookfield Place tenant roster includes fashion retailers Salvatore Ferragamo, Calypso St. Barth, Hermes, and Ermenegildo Zegna as well as Burberry and Michael Kors.
And while Westfield’s World Trade Center project might be a very nice shopping center, at Brookfield Place the goal has been to make everyone forget they’re in a center at all.
“The brands that we have signed do not like malls, so we’ve had to completely physically change our look and feel to attract them,” Hogan said. As part of the renovation, the retail brands will have frontage on the street outside the building. “We’ve turned the inward facing mall out, so that it’s an urban experience.”
The Brookfield dining terrace will favor high-quality, fast casual food over the usual food court fare.
For one vendor, Mighty Quinn’s Barbeque, Brookfield Place will be only their second location. “They don’t have the credit that a large chain would have, but they have a business model that has been successful on the Lower East Side and we were able to do a deal,” Hogan said.
That kind of flexibility is also open to potential fashion tenants as well.
“The last thing that we want to do is create something that people have seen before, or something that can be copied,” Hogan said.
Street level retail is also taking on new life amid all this activity. Darrell Rubens of Winick Realty, who recently signed a new restaurant lease at 4 New York Plaza, is excited about what the retail boom will mean for eating Downtown.
“This is going to add a lot of restaurants that are really needed in lower Manhattan, all the fine dining, opportunities that aren’t really there now,” he said.
Meanwhile, on the other side of the island, Futterman’s RKF is leasing the Howard Hughes Corporation’s redesigned Pier 17 mall in the South Street Seaport, which he said could become a destination for restaurants, movie theaters and entertainment. The mall, scheduled to open in 2015, will also offer some rare large footprint spaces in Lower Manhattan.
Some estimates put the total new retail Downtown at more than one million s/f. But is it enough?
“I don’t think there’s any question from our perspective that there’s more demand than there is space,” Futterman said.
Downtown has been underserved by retail for years, said the Downtown Alliance’s La Russo, who thinks the time is ripe for that to change.
“All the things we’ve been talking about for so many years are happening now… I think retailers will find they can’t afford to not be in this market,” she said. “It’s such a huge opportunity and there’s such a hunger.”
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