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NEW YORK ROUNDTABLE 60 • SHOPPING CENTER BUSINESS • December 2016 Ariel Schuster: I can reply to that because we're marketing a 52,000-square-foot car- pet store, which is ground, second, lower level and we've had some great tenants looking at the sales numbers on Fifth Ave- nue and they're very strong. The numbers J. Crew is doing are a very good indicator of how strong the Flatiron District is. White: Are they four digits per square foot? Schuster: Yes. A few years ago, J.Crew took on the third floor and expanded, which is very rare in New York City, so that shows how powerful the Flatiron is. It is a perfect combination of some tourism, es- pecially with Eataly; great office in terms of who is actually working there — the tech sector as well as others — and you do have a residential component. You have Upper East Side people going down there and shopping because it has a lot of the great stores. Flatiron doesn't have the foot traf- fic and mass tourism in SoHo, so from a New York perspective it's a great place to shop, and the buildings are big enough to accommodate all of these stores. I think looking at the size of buildings is an im- portant reason to how things evolve. It's a reason Nolita, while it's cute, has never re- ally taken off because the stores are small. Flatiron really is a great market. Tenants often see their stores outperform the rest of their city stores. Stephanou: With transportation, Flat- iron is accessible from the West Side and from the East Side and you have the an- chor of Union Square at one end and the market with Eataly going north of 23rd Street. Eataly has really transformed that and to the city's credit, I think they creat- ed more public space and that has done a lot on Broadway between 20th and 23rd Streets. That's really a place, and a fun place to go and eat. Brian Cohen: There's even a submarket of that area, which is Irving Place. We're working on a project right now to help reposition some of the retail that's there. Who is driven to shop there? What are your thoughts on Irving Place? Lisa Rosenthal: I live near Irving Place, and I can share with you that it is very qui- et. Tourists don't even know it exists; it's just not that accessible, even though it's just off Park Avenue. It's a market between two markets. If you can find some insti- tution or something that has a following, that's great, but for a retailer that's trying to build a business, it's kind of still off. It needs to be a bit of a destination. SCB: What other areas do you see that are hot right now for retailers? Schuster: NoMAD is a market that has been talked about for a couple of years. Ten years ago it was the worst part of the city, but it's turning. Food often is the leader in the neighborhoods. The Smith opened, and they're mobbed every sin- gle day. The hotels — ACE and NoMAD kicked that off. I think the only impedi- ment right now is you have a lot of long- time owners who are reluctant to turn over their spaces, similar to Canal Street where tenants are paying cash and paying big rents and the landlords aren't necessarily incentivized to clean up the buildings. You are seeing some trades, and some savvier investors going in and buying these build- ings and putting money into them. I think NoMAD — both on Broadway, and now we're seeing on Fifth — will look very dif- ferent in about five years. SCB: In that area, there are some cool tenants, then next door you will have something old. White: One of the characteristics of the neighborhood is that very old ownership. I think it's in 2017 there are some sprinkler compliance laws that will go into effect, and this will require a lot of money to up- grade the buildings. We might see some turnover with relation to that, or you'll see them start to get fined and it will just sort of happen after the fact. I think it may be forced change ultimately. Rosenthal: We worked on a new, under- ground development called Turnstyle in the Columbus Circle transit marketplace. It is reclaiming space — it's a subway con- course. It is brand new space and it's very exciting; 15,000 square feet of retail in an otherwise underused subway concourse. It's full of very interesting, cool brand uses, ranging from Papyrus to Lush. It is not only being used by commuters who use it for subway transit, but it is also cre- ating a new place for people to come and shop. It's a good way to reclaim unused space. White: It's very hard for some retailers to operate in those environments. I worked with the Port Authority for a while; there are going to be more rules and regulations From left, Scott Plasky, Marcus & Millichap; John Swagerty, Acadia Realty Trust; Nina Kampler. Kampler Advisory Group; Mark Kostic, Brookfield Property Partners; Stephen Stephanou, Crown Retail Services; and Brian Cohen, Goulston & Storrs.