Shopping Center Business

MAY 2016

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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HIGH STREETS 260 • SHOPPING CENTER BUSINESS • May 2016 their tenants. Last year, for example, fashion conglomerate Inditex, the parent company of Zara, paid $280 million for a retail condo at 503-511 Broadway. This March, Zara opened a 47,361-square-foot, three-story flagship store in the space. AREAS TO WATCH Looking further south, the Lower Man- hattan market is emerging as a luxury retail destination with tony tenants, like Bottega Veneta and Ermenegildo Zegna, opening stores at Brookfield Place. "Brookfield is a great project on the Hudson River that is very unique," Steph- anou says. "It will improve once the con- nection between Brookfield through World Trade Center retail complex to Fulton Street is complete. I'm optimistic." Just south of Central Park in the Colum- bus Circle neighborhood, Nordstrom is building its first-ever New York City de- partment store along Broadway between West 57th Street and West 58th Street. The approximately 363,000-square-foot store is expected to open in 2019. "The Nordstrom opening will help an- chor Columbus Circle along with Time Warner Center," Stephanou says. And, all eyes are on Hudson Yards on the Far West Side to see what retailers will announce next. Neiman Marcus will open its first store in the city as the retail anchor of the 17-million-square-foot develop- ment. The 250,000-square-foot flagship department store will open in 2018. "In New York City, the market to watch is the development of Hudson Yards," Spiegelman says. "This is very much the future of the city." LOOKING AHEAD It remains to be seen how the tug-of-war between rising rents and increasing avail- ability will play out on New York City's high streets in 2016. "I think we're seeing occupiers be very selective about their real estate decisions," Spiegelman says. "I anticipate transaction velocity will be moderate into 2017. There still will be traffic, but retailers want to see better economics on high street retail. Un- til pricing levels off, we will see growing availability." Despite the short-term challenges, re- tail experts are bullish on the long-term outlook. "I believe New York is and will continue to be the best shopping destination in the world," Bellantoni says. "When a brand comes here, it helps with their entire store rollout. It creates a buzz and generates much more excitement for them than anywhere else. If we keep absorbing these available spaces, it will be a great 2016." Kampler shares this positive view: "New York City as a major global tourist desti- nation will not change in the foreseeable future, and might even be fueled by grow- ing instability in Europe," she says. "And, the Number 1 activity that tourists want to engage in is shopping. They want to bring home something that's special and tangible. It's a vital point of travel. With those two factors, New York City remains one of the most protected high streets in the world." SCB

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