By Andria Cheng
Link to Complete Article in it’s Original Format:
May 25, 2022 | 2:22 P.M.
Karen Bellantoni, a vice chairman with Newmark with more than 30 years of retail property brokerage and merchandising experience, said retail leasing activities in New York these days are the most “vigorous” since the 1990s. And she’s not the only one who’s surprised about the current state of retail in the nation’s biggest commercial real estate market.
“I’ve never been busier,” Bellantoni, who represents both landlords and tenants in New York and other urban markets, said in an interview at the 2022 ICSC conference in Las Vegas this week. “The last four months has surprised me. All of a sudden, it’s as if the lid was lifted off the bottle. Everything started to flow. It just seems the switch just turned on. I would have thought the switch would have turned on in ’23 instead.”
As New York seeks to bounce back from the fallout of the pandemic, some Big Apple brokers at the ICSC event said that while they watch the effects of rising gasoline prices and other inflationary pressures, higher interest rates, supply chain and labor shortage concerns, and whether the United States will possibly plunge into a recession, market uncertainties haven’t cut retail leasing demand, especially in hot neighborhoods including Manhattan’s SoHo and Williamsburg in Brooklyn.
“Good things happen to good real estate, and it doesn’t matter whether you are in a good or bad market,” Kenneth Schuckman, president of Schuckman Realty, said in an interview at ICSC, recalling the words a top New York developer once told him. Broadway in SoHo “may have a dip, but it’s going to come roaring back, same with in Times Square. Best location will get re-leased. New York will come roaring back faster than markets outside of New York. You can’t bet against New York.”
Part of the surprise is that the office market, which has traditionally brought retail customers who commute into the city and who shop near their workplaces, is still struggling as workers slowly return. But in a sign of the city’s appeal, 22 retail brands looking to open their first brick-and-mortar Manhattan locations leased over 184,000 square feet of new deals in the first quarter, representing 35.3% of all retail transactions, according to a CBRE report.
For instance, Michelin-starred Taiwanese restaurant Din Tai Fung signed a 15-year, 26,400-square-foot lease just north of Times Square for its first East Coast location, while California-based Remedy Place, billed as the world’s first social wellness club that offers services including cryotherapy and vitamin injection, signed a lease in the Flatiron district for its first New York location and its second after its West Hollywood, California, flagship. Celebrity chef Todd English, meanwhile, signed a lease at 15 Park Row in lower Manhattan to open a restaurant, nightclub and lounge to mark his return to New York since his namesake food hall closed during the pandemic.
Overall, leasing volume totaled 520,832 square feet in the first quarter, up 15% from a year earlier, and included three deals over 25,000 square feet each, according to a Newmark report. Leases were signed for space that had been available for several years.
Besides leases by tenants opening their first New York locations, luxury retail brands and high-end restaurants that had been inactive during the pandemic also signed “significant deals” last quarter, according to Newmark. That followed Manhattan’s annual leasing volume recovering last year to just 80,000 square feet, or 2.9%, short of the 2019 level pre-pandemic, Newmark said.
“We’ve seen activities start to pick up,” Keith DeCoster, director of market data and policy for the trade group Real Estate Board of New York, said in an interview. Concepts with “unique products and immersive experiential retail are what customers are responding to. … People want to go out, whether it’s to a gym or dining or to a club. There’s no digital spa treatment that I know of. You can’t replicate and reproduce that over the internet. That was the trend for landlords pre-pandemic. That’s also what landlords and retailers are investing in post-pandemic.”
About Schuckman Realty Inc.: Schuckman Realty is a full service commercial real estate services firm serving New York City, Long Island, New Jersey, and the surrounding tri-state area. Schuckman has developed a reputation as a leading retail broker and developer in the New York Metro area, with special expertise in developments, redevelopments, and renovations in all Five Boroughs of New York City and Long Island. As a strategic planner of retail stores, shopping centers and boutique projects, Schuckman has been responsible for tens of millions of square feet of leasing and development and has been hired by numerous national retail chains to facilitate macro–market penetration. We attribute our success to our intimate team’s proficiency in market analysis and site planning, in addition to tireless dedication and extensive experience from both sides of the table.