ICSC New York Update: Retailers are growing in a calculated and cost effective way by getting creative with store footprints and locations. While their appetite for the best sites remains strong, the sought-after high-street space in the city will be limited through 2017, pushing retailers into new areas. JLL’s retail experts point to a few emerging New York City submarkets that are catching the eye of domestic and increasingly European brands looking to expand:
- Eataly, the mega Italian food market, is located off of Madison Square Park and is one the most visited tourist destinations in New York City. As the result of Eataly and several boutique hotels, the pedestrian foot traffic in NoMad has dramatically increased due to its prime location between Madison Square Park and the Empire State Building. The market’s average asking rents have jumped north of $200 PSF,* with full service restaurants and grab-and-go establishments including: The Smith, 5 Napkin Burger, Num Pang and Hill Country Fried Chicken.
- Institutional investors are aggressively pursuing retail acquisitions on Canal Street, in hopes of attracting retailers similar to those already on Broadway, driving out discount retailers making this up-and-coming street’s rents average upwards of $300 PSF*.
- Fifth Avenue (42nd-48th Street): Institutional landlords are buying up all the real estate after retailers have learned that they can pay a third of the rent and still have heavy pedestrian foot traffic. Examples of this shift include Joe Fresh, Urban Outfitters, Oakley, and H&M migrating just south to save significant rent with average rates ranging $600 – $1200 PSF*.
- The revitalization of the World Trade Center and the surrounding area will afford a diverse group of retailers and restaurateurs an opportunity to expand into the once again thriving Financial District. Westfield’s development of the retail space is a prime example of how to respectfully integrate a shopping center within a major tourist/visitor destination and a major office complex.