Market is mixed bag for retailers.
"Holiday sales were lukewarm for many retailers, though there were exceptions in both the high and low end of the market," Friedman reports. "Rents are rising, and many retailers are entering or expanding in the market."
According to Friedman, the Christmas shopping season started with a bang the day after Thanksgiving, but ended with retailers panicking and marking prices down, fearing that shoppers would not pay full prices. To further complicate matters, the entire season from Thanksgiving to Christmas was five days shorter than last year.
1997 FRIEDMAN REPORT
Rental Range 1997 Locations $ per sq. Lower Manhattan Broadway $75-$100 Nassau Street $50-$75 Fifth Avenue 34-42nd $90-$125 42-49th $110-$200 50-59th $300-$450 Madison Avenue 42-50th $110-$150 51-60th $125-$250 61-72nd $250-$350 Lexington Avenue 42-57th $100-$125 57-61st $150-$250 Third Avenue 42-57th $100-$125 57-61st $100-$125 Broadway 72-96th $80-$125 Columbus 67-96th $55-100
Prepared By: Edward A. Friedman, Executive Managing Director, Newmark & Company Real Estate, Inc.
"Sales were poor in the computer and electronics sectors of the market, with CompUSA, Tandy's Incredible Universe chain and its Computer City stores reporting disappointing sales," says Friedman. "Other retailers serving various price points reported strong sales during the Christmas season, including Pier 1 Imports, K Mart, Ann Taylor and Tiffany."
According to Friedman, there were many notable store openings in 1996, while several retailers plan to open or expand in 1997. These include Disney, which opened in Times Square on 42nd Street off Seventh Avenue; Warner Brothers, which expanded on Fifth Avenue and 57th Street and will open a store at One Times Square; K Mart, which had opened an additional store on Broadway and Astor Place; and Sports Authority, which replaced the now defunct Herman's Sporting Goods with stores on Third Avenue and 51st Street, and on the northeast corner of 57th Street and Sixth Avenue.
In addition, Loehmann's opened in the former Barney's space on Seventh Avenue and 17th Street; Virgin Records continued its expansion by committing to open a store on 14th Street in the Union Square area near PC Richard's new store and Bradlees Department Store; Staples, which is opening a store on Union Square; and Cosmetics Plus, which opened in the Flatiron district.
The expansion of existing stores and the influx of new retailers to New York City has driven rents up as much as 10 to 15 percent in Midtown. In most Midtown prime areas, retail rents are up approximately 10 percent from last year, and space has tightened on Fifth Avenue in the 50s and Madison Avenue in the 50s and 60s.
Friedman says the next wave of new stores will open on Times Square and 42nd Street, where the north side of the street is the site of Tishman's E-Walk, which will include Sony Theatres and a hotel. Ratner's 42nd Street, directly across the street from E-Walk, will house a HMV, AMC Theaters and London's Madame Tussaud's.
Further east, the new owners of Rockefeller Center are repositioning the complex's retail space. Currently, Christie's Fine Art Auctioneers is negotiating a major lease there.
The next area for new development will be the former Alexander's Department Store site, which occupies a square block stretching from Lexington to Third Avenue from 58th to 59th Street, Friedman says. This site - the last major assembled site remaining on the East Side in Midtown - will house a mixed-use development, including a major retailer and either a residential component or a hotel.
"In 1997, we will continue to see major big box retailers opening stores here," asserts Friedman. "Rents are starting to inch up and supply is dwindling. Although some retailers won't survive, new ones will emerge to take their place, and 1997 looks to be a good year."
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|Title Annotation:||Manhattan, New York commercial real estate|
|Publication:||Real Estate Weekly|
|Date:||Feb 19, 1997|
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