Building boom could add million s.f. to retail inventory.

With the economy on a roll, New York City could add as much as a million square feet of new retail facilities in the next 18 months.

So says Charles Aug, president of Garrick-Aug Associates Store Leasing Inc., one of the city's top retail brokerage firms, who noted that available store space has shrunk by approximately 40 percent in New York City during the past three years.

"With the supply of retail space dwindling and demand stronger than ever, there couldn't be a better time for a construction boom," Aug said. "The market for prime space is continuing to tighten, and there's unprecedented opportunity today to attract space users for stores, restaurants, art galleries and entertainment-oriented facilities."

Currently, the real estate executive estimates that there are more than 50 development projects in the works and at least 18 building sites in advanced stages of planning. At least another dozen sites are expected to surface in the next six months.

New York City is a market that has been rising steadily to the economic forefront, as evidenced by several factors, noted Aug. "One significant factor is the redevelopment of the Times Square district, whose reverberations can be felt in surrounding areas throughout the city. In addition, the growth and penetration of Big Box industries are paving the way for vertical retail development. As a result, expanding businesses are looking for cost effective space in the right locations."

Garrick-Aug has recently identified a growing trend in tenant representation: outsourcing by major retail chains. "We have been experiencing an influx of both local and national retailers anxious to utilize our company's expertise in tenant representation," Aug said. "As new development comes on-line, tenants searching for more space have been coming to us to satisfy their expansion requirements in the Tri-State area. We conduct all the research and market analysis, and since we know all the local landlords, all the tenant has to do is move in. In one office, we have divisional managers serving over 250 retail markets."

Emerging New York City retail districts that have demonstrated particularly strong growth of late include the SoHo and Chelsea neighborhood, noted Aug. "The SoHo market has bloomed from unique to mature and now offers a good blend of stores, art galleries and restaurants," he said. "Garrick-Aug has been responsible for two dozen retail deals there, including Polo Ralph Lauren, Betsy Johnson and Banana Republic."

A still developing area, according to Aug, is Chelsea's " Ladies' Mile, " which now features stores such as Old Navy, Filene's and Burlington Coat Factory. "But there's still plenty of room for growth and expansion in this district," he said, claiming that Garrick-Aug created the spark for redevelopment in this market when it represented Daffy's over 10 years ago in a lease for 27,000 square feet at 111 Fifth Avenue.

"Another hot New York City market is the Financial District, where we are seeing numerous conversions of office space into residential housing," Aug continued. "As a result, there is an increase in evening and weekend traffic which is spurring the growth of retail in this marketplace."

Aug pointed to the rise in tourism in New York as yet another catalyst for growth. "With a dramatic decline in crime and unemployment, New York is fast regaining its stature as the number one tourist destination city in the world."