Looking back: Garrick-Aug's year-end round-up 2000.

As one of the original consultants on the $150 million redevelopment of Times Square, our chairman Charlie Aug is more akin to a visionary than a broker. He predicted that by Y2K, nearly 85% of the retail space in the area would be leased, and he was right. Moreover, the retail market there now includes such mega ventures as Toys R Us, Lundy's, and Planet Hollywood.

Charlie calls Times Square "New York City's Jewel in the Crown," reasoning that in addition to being the country's number one tourist destination, its success has contributed to the revitalization of two adjacent commercial districts and an upscale residential neighborhood. The residential component, which was formerly Hell's Kitchen, is now referred to as Clinton, and is benefiting from development by the likes of RFR Davis, Related, and Silverstein Properties.

Twenty-five years ago Charlie's vision for the then-seedy area included enticing new construction and development, using signage to encourage better retail, and keeping existing theatres intact. Today, as a byproduct of the area's activity, new construction is also moving west and south with a variety of commercial and residential projects. All of which provide additional opportunities for retail in the area.

Which brings us to an extension of the Times Square success and into the West 30s, which, according to my colleague Faith Hope Consolo, GarrickAug's vice chairman, has greatly profited from the spillover. The effect is enormous on the Garment Center because, as it becomes commercially diverse, it is already supporting retail leases averaging $100 per SF on side streets! Bordered by Times Square and Herald Square, the Garment Center is perfectly positioned to welcome such untraditional retailers as Crunch Fitness, New York Sports Club, and Office Depot.

The fact is the center of New York City's fashion industry has become increasingly fashionable for new media, advertising, and publishing companies, as well as traditional garment businesses. From a retail perspective, another benefit is that each category brings its own spectrum of retail businesses, from office supplies to lingerie.

We also saw renewed activity this year on the Garment Center's westernmost border. The year 2000 signaled the progress of major residential development, albeit largely influenced by the imminent relocation of Amtrak from Penn Station into the Farley Post Office.

Managing director Andrew Pittel points out that a 14-screen Sony movie theatre and a 20,000 SF Internet firm will be anchoring the site of a residential high-rise tower under construction on West 34th Street, between

Eighth and Ninth Avenues. Across the street at the New Yorker Hotel/Ramada Inn & Plaza, Mr. Pittel is the exclusive agent for retail space comprising nearly 13,000 SF, including a 3,000 SF vault that is being marketed as a possible bar, restaurant, or wine vault. In other words, after three decades of doldrums, this area is seeing revitalization with a residential presence.

As per downtown trends, now that SoHo and TriBeCa are the "establishment" downtown (even Guess? Inc. has secured a 20,000 SF flagship store at 512 Broadway, thanks to managing director Sal Ferrigno, who orchestrated the deal), Faith and her partner Joseph Aquino have jointly proclaimed NoLIta the next frontier for trendy Manhattan.

The area, which is bordered by Mulberry, Mott, and other streets east of Lafayette, is being positioned as the "Left Bank" of New York, patterned after the artists' district of Paris. High-fashion shoes stores have replaced the Chinese fishmongers and $100 per SF for retail space has replaced to $50 price tag or less than a year ago.

We also saw a unique trend take shape in the boroughs in 2000, where director Nick Kalomeris and I became involved in a virtual exodus of retailers from the malls into New York neighborhoods. Such exclusively mall market retailers as baker Shoes, Electronics Boutique, and Kay Bee Toys moved onto highly trafficked streets in Brooklyn, Queens, and the Bronx.

Other new concepts in retailing this year included the "spin-offs," in which big box stores such as Target and BJ's have just concluded their first year of operations in former industrial parks. Depending upon the economic forcasts, we believe that reworking industrial parks will continue in 2001. That is if local governments provide such improvements as better transportation, new streets, and better lighting. New Jersey's new Monorail, for example, could contribute to this type of retail movement.

Traditionally, retail follows the activity in office and residential sectors, i.e., where there are people, there are stores. But another phenomenon that became entrenched in 2000 was the proliferation of high-end retail in untraditional neighborhoods, including sparsely populated areas, such as the Meat Packing District, North Chelsea, and Penn Station West.

Unlike the suburbs, Manhattan's limited space necessitates the development of new markets where there were distressed areas. It is a cycle that is repeated constantly. Such neighborhoods as Chelsea and the Upper West Side are prime examples of upwardly mobile trends in residential neighborhoods. Where there were dozens of dry cleaners and small hardware stores on Broadway in the 80's, there are now Coach, Sisley, Club Monaco, and other high-end retailers, once exclusive to Madison Avenue and the Gold Coast.

So after decades in this business, I can join my colleagues and vouch for last year's boom. But I am also looking at a solid future. Why? Because this has also been a uniquely creative period in terms of how the markets have been redefined. Non-traditional neighborhoods have become desirable areas in which to do business and there is a trend in the parity of retail markets between the city and the suburbs. Traditional mall stores and big box retailers are moving onto city streets; and fancy restaurants and upscale boutiques are opening outlets in suburban hamlets. But the most obvious gauge for these unusual directions continues to be the renaissance of Times Square. After 50 years of tawdriness, it is the city's greatest magnet for tourism -- the area in which to spend time with the family. Perhaps, only Las Vegas rivals Times Square in unexpected transformations.

per the year-end roundup, despite dire predictions regarding an economic slowdown, it's all relative. After a stunning boom for the past five to seven years, growth remains consistent throughout the Greater New York metropolitan area. In addition, there is still a strong demand for space, and rents are stabilizing. The retail market continues at a steady pace - and it's fast.