NEW YORK CITY-Lower Manhattan is experiencing one of the lowest retail vacancy rates in the city – and a shopping renaissance, says Chase Welles, REBNY retail chair and vice president of the Shopping Center Group, who hosted “Downtown Retail Redefined,” a panel presentation and discussion at the Harvard Club on April 11.
Moderated by Liz Berger of the Alliance for Downtown New York, the program focused on four keystone projects: Brookfield Office Properties’ redevelopment of the World Financial Center, the Port Authority of New York & New Jersey’s re-creation of the World Trade Center retail, the MTA’s vision for retail at the new Fulton Street Transit Hub and Howard Hughes Corp.’s overhaul of the South Street Seaport.
“Any serious retail tenant looking at expanding in New York has to look at the Downtown and Fulton Street corridor,” Welles tells GlobeSt.com after the event. “From the trade centers all the way down to the seaport, there’s an unparalleled amount of opportunity. And the numbers back it up. It should be extremely successful.”
Throughout 2011, significant progress was made at each of the four sites. In June, Brookfield rolled out its $250 million redevelopment plan of the WFC’s iconic Winter Green. Totaling approximately 200,000 square feet of retail and public space, the property’s crowing jewel will be a new glass pavilion at West Street, where up to three anchor retail spaces will be created directly across from the 9/11 Memorial. In total, more than 40 upscale fashion tenants, a European-style marketplace and new waterfront dining will be added.
Also in June, the Port Authority advanced a billion-dollar deal with Australian-based company Westfield for 360,000 square feet of retail to come online at the World Trade Center site in 2015. After 2 WTC is completed, the site will total 488,000 square feet of retail space.
At the Fulton Street Transit Center – which will link 10 existing subway lines to PATH service and the World Trade Center – will also be home to 70,000 square feet of retail and office space. Closer to the waterfront, Howard Hughes and SHoP Architects are planning to raze the existing shopping mall at Pier 17 to pave the way for a new LEED-certified indoor-outdoor three-story structure with new high-end stores, restaurants and space for the performing arts.
The projects are all coming online as local tourism continues to increase. Last year, a record of 50 million visitors spent an estimated $32 billion annually in the city – and Lower Manhattan played a large role in that. According to the Downtown Alliance, Lower Manhattan attracted 9.8 million visitors to its major museums, events and attractions in 2011, marking an 8% increase from 2010. In addition, the National September 11 Memorial Plaza, which opened in September, attracted one million visitors in its first 3.5 months.
“The number of commuters and tourists is staggering coming through here,” Welles says. “The World Trade Center is the most visited place in New York after the Met in its first year. About 200,000 people a day go through the World Trade Center Site, and 300,000 people go through the Fulton Street site, and those numbers are just not arguable.”
As a result of the growth in tourism, employment and 60,000 new residents, spending in Lower Manhattan is now an estimated at $4.7 billion annually, according to the Downtown Alliance. In turn, 90 new retailers opened in 2011, and at least 13 more are coming soon, the Alliance says.
Retail rents are also going up. According to CBRE, Downtown rates have gone from $131 per square foot in the third quarter to $157 per square foot in Q4 2011, a sign that the neighborhood – from Battery Park to Chambers Street – is rising once again.
“Billions of dollars are being spent on creating this, and it is being built by some of the best architects, retail planners and developers in the world,” Welles says. “I’m a believer.”