Developers shop around.

The success of the Time Warner Center has opened developers' eyes to retail opportunities both in mixed-use and "vertical mall" development.

According to some insiders, the Columbus Circle mega-center is inspiring other developers to look to high-end retail to help create something bigger and better for New York City.

"New York City vertical retail has not worked well, but I think it will work in Time Warner and I think it may affect developers in the future to do vertical malls," said Edward LaGrassa, manager of commercial business development at Rose Associates.

Time Warner building developer, Martin S. Burger, executive vice president and chief financial officer of Related Urban Development, said the center was the "first vertical retail project that's successful in New York City" and said its success will be hard to duplicate in the city.

Although retail rents are approaching $450 per s/f, the stores' reported revenue is making the tenants' investments worthwhile, Burger said, adding that William Sonoma's 13,000 s/f store has brought in about $75,000 a day several times.

Mitchell N. Friedel, an executive vice president at retail specialists, Robert K. Futterman who, until recently, leased out retail space for Related at the Time Warner Center, has been recruited to lead Futterman's efforts to facilitate clients eager to develop vertical malls, mixed-use and lifestyle centers.

Robert K. Futterman Associates has cited its recent growth as reason for strategic expansion around three divisions: RKF Retail Brokerage Services, RKF Retail Property Advisors and RKF Strategic Retailer Services.

"We have always provided brokerage and comprehensive consulting services for retailers and owners," Futterman said. "This new structure enables us to more powerfully leverage our experience on their behalf.

Friedel--who is heading up Futterman's Retail Property Advisors unit--indicated last week that the company would "absolutely" try to get involved in vertical mall space, in addition to mixed-use developments and lifestyle centers, adding, "We will be announcing a few projects shortly. The tone of the projects relies a lot on the retail component.

"RFK Retail Property Advisors has the knowledge and expertise to aid investors, owners and developers of retail real estate with much more that just retail brokerage services.

"We will assist them in devising the right merchandising mix, positioning or repositioning their projects and executing these strategies from a leasing perspective." However, Burger said the success of the Time Warner Center is based on its location.

"There's only one place you can be on the corner of Central Park West and Central Park South," he said.

Regardless of the future of vertical retail development, Friedel said developers have been more choosy about their retail tenants.

"That's always the focal point of these centers," he said. "You can have high-end tenants and restaurants or low-end tenants and restaurants--and that sets the tone." LaGrassa also said the fight retail space can net better residential rents in a mixed use development.

"The wrong tenant can have a negative perception," LaGrassa said. "Which has a better perception: a Steuben Glass store or a drugstore?"

The comments came as the Real Estate Board of New York announced average asking rents in Manhattan for retail space rose 10% to $97 per s/f. Available retail space in Manhattan declined 19%, with more than 2.7 million s/f being absorbed. The increase was most dramatic along Manhattan's West Side corridor, with rents up 55% from last year. Average asking rents on 57th Street between Fifth Avenue and Park Avenue are $850 per s/f.