Brokers predict Fifth Avenue retailers will head downtown.
Fifth Avenue is a name known to shoppers around the world, but the avenue is longer than the 11-block stretch between 49th and 60th street where luxury retailers have traditionally forked over sky-high rents for avenue frontage.
And, according to retail experts, there arc signs that retailers seeking the cache of the famous thoroughfare will be looking further south in 2013.
Average asking rent on Fifth Avenue between 49th and 60th Streets dropped slightly between 2011 and 2012, from $2,388 psf to $2,283 psf, according to data compiled by Cushman and Wakefield. Between 42nd and 49th Streets, on the other hand, they jumped 13.9 percent over the same year, from $888 psf to $1,011 psf.
Speaking at the firm's quarterly press conference earlier this month, Cushman's Joanne Podell, executive director of retail services, predicted retail growth extending all the way to Union Square. "Today people--and particularly tourists--begin on 14th Street and they walk all the way to 60th," she said. The section of the Avenue between 23rd and 34th Streets--extending north from the already well-retailed flatiron district--may be the next area of growth, experts say.
"I think you're going to see a lot of 23 to 34 pick up the NoMad energy --north of Madison Square Park. There's a lot of changes happening on Broadway," said Gary Alterman, an EVP with Robert K. Futterman and Associates.
Side streets, including 25th and 26th Street, have also been attracting new restaurants, he said. Potential tenants have already noticed the area, according to Faith Hope Consolo, chairman of Douglas Elliman's retail group.
"They're not just kicking the tires," she said, citing knowledge of three or four major deals in the works involving "household name" retailers of bridal wear, footwear and lady's and men's apparel.
Older, low-rise buildings in the neighborhood have long made retailers wary, said Joseph Aquino, also of Elliman's retail group. But he also sees that changing. "That area is starting to get very hip with the younger generation," Aquino said. "The hotels get a lot of Europeans."
The portion of Fifth Ave that runs through the Flatiron District, from 14th Street up to 22nd, has proven enormously successful for retailers, the brokers said. Alterman pointed out the numerous expansions in that corridor, where retailers such as J. Crew, Club Monaco and Banana Republic have either opened second stores or expanded into upper stories.
And the section of the avenue between 42nd and 34th Street benefits from the same fool traffic. Recent tenants include the utilitarian Staples, but also a new flagship for the men's clothing store Orvis, and Panera Bread to provide marching hoards of shoppers with needed sustenance.
With a lot of space still to be absorbed, that stretch is likely to attract more mid-priced fashion in the future, Alterman said.
"You know--when a retailer has a Fifth Avenue address, you can't tell if it's Fifth Avenue in the 20s or Fifth Avenue in the 50s or Fifth Avenue in the 40s," Consolo said.
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|Comment:||Brokers predict Fifth Avenue retailers will head downtown.|
|Publication:||Real Estate Weekly|
|Date:||Jan 23, 2013|
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