FiDi’s Retail Problems
Lauren Elkies Schram March 16, 2016, 9:45 a.m.
At 9:30 a.m., the moment the bell rings at the New York Stock Exchange, the free market system seems alive and well. Trade is good. Commodities are plentiful. Overpriced items are rebuffed—underpriced ones welcomed.
But step beyond the confines of the NYSE’s headquarters at 11 Wall Street and this proposition becomes murkier in the rest of the neighborhood.
For some commercial tenants and residents of Lower Manhattan simple things like picking up groceries after work or getting a key made is a nightmare. For others, it’s a minor annoyance. Still others say it isn’t a problem at all.
They might all be right. The truth is, while services and amenities are less plentiful than they are on, say, the Upper West Side, they are in greater abundance than ever before. And they will only improve.
The gap Downtown, said Matthew Messinger, the chief executive officer and president at Trinity Place Holdings, is the “entire kids category…everything from clothes to activities” as well as grocery stores and spas.
Trinity Place Holdings is developing 77 Greenwich Street, an 85-unit residential condominium with 7,000 square feet for retail and a 476-seat elementary school.
The building will try to meet some of its residents’ needs with a self-service dog wash as well as a residents-only dog run. As a result of press around the dog amenities in the building, Trinity Place Holdings has been approached by prospective tenants in the pet industry to nab the building’s retail space.
While some resources are harder to find Downtown, the area south of Chambers Street and east of Broadway is home to eight hardware stores and locksmiths, according to the Alliance for Downtown New York. There are 20 dry cleaners, eight supermarkets, eight tailors and seven greenmarkets.
“Those services are in the neighborhood,” said Lee Block, an executive vice president at Winick Realty Group. “There might not be as many options as there are in other parts of town, [but] I think more are coming as the office workers migrate Downtown and more of the buildings are converted, and we get more residential units online. There are more restaurants looking at space. Other restaurants have announced they are moving Downtown and are under construction.”
At 160 Water Street, Mr. Block and colleague Darrell Rubens are marketing 25,000 square feet for Vanbarton Group, and they are targeting supermarkets. He said there has been interest from a number of groups.
“I think that plays to the fact that there aren’t as many tenants serving the market for the residents in the neighborhood,” Mr. Block said.
At 180 Water Street, Mr. Block is marketing 10,000 square feet for Vanbarton Group at grade. Much of the interest has come from “food and other needs, like gyms [and] other services that cater to residential and office tenants.”
Michael Goldban, the senior vice president of retail leasing at Brookfield Property Partners, said that the company’s Brookfield Place on Vesey Street offers a lot of options for residents and office workers.
“The local community is an important stakeholder to us,” Mr. Goldban said. “We have Parm, which is accessible food. Hudson Eats is really for everybody. Even Le District, which is higher end, has lots of different options, takeout stuff and you can buy foods. It’s really kind of a grocery marketplace. Those were all deliberately done.”
There is a Drybar blowout salon inside Brookfield Place as well as a children’s clothing and baby gear store, Babesta, a Rite Aid drugstore and an Equinox. And the public spaces are used for dancing, movie nights and children’s sing-alongs on the weekends.
And for what’s missing on a given block, residents and office workers don’t have to go hunting high and low for it, said Ric Clark, the senior managing partner and chairman of Brookfield Property Partners and a Tribeca resident.
“You don’t have to walk that far to find this stuff. I mean Tribeca is a five-minute walk,” Mr. Clark said. “I think every day there’s another great restaurant or another great retail or amenity outlet that’s opening up. Lower Manhattan is phenomenal. Personally I consider south of Canal one big community…I probably go to 14th Street and not much beyond that.”
Some retail and office tenants are targeting Lower Manhattan.
For example, California-based 18|8 men’s salon will be opening imminently at 20 Pine Street, according to Mr. Block, who represented the tenant in the deal.
“They will cater to the commercial and residential tenants in the neighborhood,” he said. “We focused on the Financial District because the population down here is a 24/7 neighborhood.”
Of course, convenience is one of the reasons why a lot of companies want office space in the area.
Nonprofits, for instance, have gone Downtown en masse because of the good supply of Class B buildings in Lower Manhattan like on Broad Street and Maiden Lane, the varying sizes of floor plates and the ease with which employees can commute via New Jersey Transit or Metro-North Railroad, said broker Suzanne Sunshine of S. Sunshine & Associates who specializes in nonprofits. She represented Planned Parenthood last year in its move from Midtown to 123 William Street in the Financial District.
“It the most competitive market offering the most amenities at that price, especially with accessibility by both employees and the stakeholders,” Ms. Sunshine said. “Basically there is no longer a reason for them not to come to Lower Manhattan as long as they can afford pricing in the $40-a-foot range.”
She noted that the food options have improved, and in fact, the area has become a destination.
But, there still aren’t enough supermarkets around.
As a result, drug stores are doing double duty as supermarkets.
“You have lots of markets that sort of serve the supermarket function that have sprouted up at different locations,” said Jessica Lappin, the president of the Alliance for Downtown New York. “Duane Reade at 40 Wall Street functions as a little bit of a supermarket.”
Michael Cohen, the president of New York tri-state region for Colliers International, highlighted that Duane Reade as a serious amenity for the area. As for why, Mr. Cohen said, “Take a trip there and you’ll see the answer.”
Indeed, this Duane Reade hawks items like sushi and has a splashy cosmetics counter that wouldn’t look out of place in Macy’s as well as a hair salon.
Ms. Lappin acknowledged that while there are places to dine in the evenings and on the weekends like Rosa Mexicano, The Malt House Financial District and Dorlan’s Tavern & Oyster Bar, “traditionally this is still a lunch market.”
Ms. Lappin said tenants aren’t complaining about a gap in services other than about a lack of retail on Water Street. She said she is working with the City Planning Commission for a zoning amendment that would allow “arcades to be filled in to create new street-level retail.” City Planning has a hearing on March 30 on the text change, which would bring mom-and-pop-type stores to arcades like the ones found at 77 Water Street and 180 Water Street.
One retail broker who only spoke on the condition of anonymity is uncertain there is enough demand for Manhattan to have three malls Downtown: Brookfield Place, Westfield World Trade Center and The Shops at Hudson Yards.
“I don’t believe people who live Downtown are going to use the retail at the Trade Center,” the broker said. “The people Downtown use Brookfield Place a little bit if they live right there, maybe for the food. Trade Center retail [when it opens later this year] is going to be tourists. I don’t think New Yorkers are going to shop there. Everybody will go once and look at it.”
He doesn’t have confidence that there is enough night business Downtown.
“I wouldn’t put a client down there that needs nighttime business,” the broker said.
“I think it has everything except grocery stores other than a Whole Foods on Greenwich [Street],” said Mr. Brod. “But the population, which is increasingly younger rather than older, is so [comfortable with the] Internet there’s less of a need for the traditional grocery store found in other residential markets.”
With additional reporting provided by Terence Cullen.
- 1 Wall Street
- 160 Water Street
- 180 Water Street
- 20 Pine Street
- 40 wall street
- ABS Partners Real Estate
- Alliance for Downtown New York
- Brookfield Place
- Brookfield Property Partners
- City Planning Commission
- Darrell Rubens
- Duane Reade
- Hudson Eats
- Jessica Lappin
- John Brod
- Le District
- Lee Block
- Ric Clark
- suzanne sunshine
- Westfield World Trade Center
- Whole Foods
- William Macklowe
- Winick Realty Group
- Planned Parenthood
- Vanbarton Group
- Michael Goldban
- 11 Wall Street
- 77 Greenwich Street
- Dorlan’s Tavern & Oyster Bar
- S. Sunshine & Associates
- The Malt House Financial District
- Matthew Messinger
- Rosa Mexicano
- Trinity Place Holdings
- One Wall Street