Stores extreme makeover as youth demographics explode

Real Estate Weekly, July 16, 2008 by Faith Hope Consolo

The outlook at mid-year is extremely favorable. Noteworthy established and emerging neighborhoods are set to turn in stellar performances.

The real estate industry as a whole has been pumping out inclement predictions but live from New York-we remain optimistic. The current economy is not going to cramp anybody's style--top retailers from around the globe know that Big Apple consumers will keep spending.

In terms of retailing trends, the big one for this year (and probably a year or two more) will be trend driven youthful apparel. The giants of this category just keep getting bigger! The latest scoop comes from Hilfiger & Co., which will be opening a four-floor, 22,000-square-foot flagship at 681 Fifth Avenue in November. Down at 600 Broadway, work continues on a former Pottery Barn location that will house Hollister-a hipper, edgier offshoot of Abercrombie & Fitch-in the spring of 2009. This will be a multi-level flagship store for Hollister, and it should add a lot of excitement to the area.

Meanwhile, Abercrombie & Fitch debuts an Abercrombie-kids division--store at 666 Fifth Avenue, replacing Brooks Brothers. The lease, which begins February 1, 2009, calls for a rent of $2,500 per square foot: So much for any rumors that the Manhattan real estate market is faltering!

The Upper West Side-Columbus and Amsterdam Avenues, and to a lesser extent Broadway, from the 60s through the 80s-is Manhattan's new "Restaurant Row," and will continue to add to its roster of fine dining. Nice Matin, 79th Street at Amsterdam Avenue, is one of the new stars. It offers hearty food in a relaxed but sophisticated setting, and it's representative of where the Upper West Side is going. Other wonderful spots for an evening meal are Dovetail, Ouest, Madaleine Mac, and eighty one. That neighborhood now has a 40-year-old reputation for housing a strong team of reasonably priced and fairly casual restaurants that nevertheless offer innovative cuisine and an atmosphere that's peculiar to that neighborhood.

What many New Yorkers love about dining on the Upper West Side is that when you're there, you're more aware of your surroundings than you are in many other parts of the city: You notice a slightly mysterious sense of romance that you won't find in the trendier areas Downtown.

That's not to say that Downtown isn't booming. A couple of neighborhoods, in particular, that we hadn't heard much from for a while have evolved over the past few years and are now the trendy places to shop and explore.

NoLiTa is a new destination for men's fashion, especially custom tailoring and shirtmaking. Barker Black (shoes) at 109 Elizabeth Street, Lugo (men's haberdashery) at 246 Mott Street, Sew (bespoke tailoring) at 229A Mott Street, The Shave Of New York (just what it sounds like) at 202B Elizabeth Street, and Roberto da Carrara (men's ready-to-wear) at 202 Mott Street: These and several other upmarket retailers have made a once-seedy neighborhood bloom again.

They'll get a lot of traffic from the fashion-conscious SoHo crowd, and from the bankers and investors down in the Financial District.

The Hudson Square area continues to re-invent itself. For many years a rather quiet and somewhat shabby-chic residential area, this neighborhood has gained considerable excrement of late, mainly from the new Apple store- 401 W. 14th Street at the corner of 9th Avenue. Clothiers and restaurateurs are setting up shop nearby, and a few interesting artisans' galleries have cropped up too. This area, and the Meatpacking District slightly below it, will be two neighborhoods to watch for the next couple of years.

Let's talk about the mighty anchors; Manhattan's department stores. They used to be the lifeblood of retailing in the city, a couple of generations ago-have gotten pretty short shrift from most observers of retail trends for the past 30 years or so. It's not that they don't do good business-they do-but they're sometimes perceived as obsolescent, an impression that was reinforced by a shakeout in the 1980s and several more recent reorganizations.

There is plenty of action in our department stores and this will surely spread to national branches. Several of the best-known are undergoing major renovations, and forming new alliances with local retailers will certainly increase their appeal.

Bloomingdale's will redesign its main floor, which houses cosmetics, mens-wear, and men's and women's accessories. The men's department will get a major overhaul, and there'll be more emphasis on sportswear. Saks Fifth Avenue will gain a completely renovated third floor, which will house its designer collections, and other changes may be pending.

At Lord & Taylor, they'll be adding Fortunoff merchandise-Fortunoff will be taking over the jewelry and housewares departments.

Midtown darling, Sarabeth's Kitchen might open there too, playing on Lord & Taylor's "fashionable mainstream" image. Bergdorf Goodman, meanwhile, will add more space for accessories and jewelry.

BY FAITH HOPE CONSOLO, CHAIRMAN, RETAIL LEASING AND SALES DIVISION PRUDENTIAL DOUGLAS ELLIMAN