There’s finally a price break in asking rents along uptown Third Avenue that might stem the rising tide of retail vacancies.
The “ask” for the big, two-level former Talbots store at 1251 Third Ave. at 72nd Street has been slashed from $1.8 million to $1 million a year for nearly 13,000 square feet, including 150 feet of wraparound corner sidewalk frontage, according to the property’s new leasing agent, Douglas Elliman’s Faith Hope Consolo.
“The changing retail market affects Third Avenue as it does other areas,” Consolo said. “It has good foot traffic, and it’s a good residential market, but we have to price it right.”
The new “ask” for the handsome, brick-clad former Talbot’s store compares with $2.1 million a year for 6,000 square feet at 1237 Third between 71st and 72nd streets — the former Grace’s Marketplace site that was completely redesigned by landlord Thor Equities.
Thor’s leasing agent, Cushman & Wakefield’s Alan Schmerzler, said, “I agree that Third Avenue currently has a number of availabilities, but I really like our storefronts and I think they are the best in the entire corridor. I think our pricing is very appropriate for the quality of the product that we have.”
Third Avenue is marred by several huge vacant storefronts on consecutive blocks and in prominent locations. Also up for grabs are 10,000 square feet in the former Gracious Home space at 1220 Third between 70th and 71st, asking $1.875 a year; and a whopping 14,700 square feet more at 1201 Third between 69th and 70th streets, which also was Gracious Home and asking $2.4 million.
The latest to go dark is the former Walgreens at 1160 Third between 67th and 68th streets. Winick is marketing its 8,100 square feet with a precious 75 feet of sidewalk frontage, plus 4,100 on the lower level, at a bargain-seeming “ask” of $1.1 million a year — but it’s a short-term sublease through the end of 2021. (The space can also be purchased as a retail condo for $42.5 million via Cushman & Wakefield.)
The 117-year-old tenement on the northwest corner of Third and 76th Street wants $420,000 a year to start for just 1,500 square feet.
It goes up 3 percent every year after that. It was a Ray’s pizza joint for many years and most recently the short-lived boutique Wink.
A few landlords seem to have a realistic sense of what the market will bear. The Heller Organization’s Adam Heller is optimistic about leasing the vacant northeast corner of Third and 62nd — “We’re expecting offers,” he said. “We’re asking $195 a square foot for 1,450 square feet plus 1,000 square feet on the lower level. Along that strip of Third Avenue, we are the best deal out there.” On a per-square-foot basis south of 72nd Street, he might be right.
The southeast corner of Third and 62nd, Acadia Realty’s 200 E. 62nd St., has long stood empty. Sources said the “ask” is $250 a foot. At Trump Plaza on the avenue’s west side between East 61st and 62nd streets, American Apparel, at the south end, will soon close along with the rest of the chain. Greek restaurant Theo’s, which opened on the north corner with a splash last year, is “closed for renovations” — but opentable.com and other online databases say it’s permanently closed.
No two locations are exactly alike of course. But Third Avenue’s miserable mile between 59th and 79th streets illustrates and dramatizes all of Manhattan’s retail-space malaise.
Third Avenue north of Bloomingdale’s is a good barometer of the entire market. It runs through one of the city’s most stable, crime-free, middle-class (by Manhattan standards) neighborhoods. Unlike boulevards often in shadow, like Broadway in the 50s, straight and wide Third Avenue enjoys abundant sunlight. There are currently no sidewalk bridges blocking entrances.
But while Third Avenue’s hardly dead and a few new tenants are coming — such as chic eatery Sant Ambroeus at 1136 Third — what does “realistic” rent mean when retailers are closing left and right? Clearly, not enough of them seem willing to pay even $250 a foot on Third Avenue.
Ominously, two of the biggest stores on the strip are listed as “available” — Urban Outfitters at 999 Third (across from Bloomingdale’s) and Pier One at 1110 Third a few blocks north.
And, even more availabilities are coming. The Commercial Observer reported that Thor and partner Premier Equities plan to demolish existing tenements at 1297-1299 Third to erect a 31-story condo tower that will include 23,000 square feet of “reconfigured” retail space.
It won’t likely be bargain-priced at first, but might have to be in the end.
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