NYC Real Estate Race Heats Up

NEW YORK — Manhattan real estate is heating up, and many footwear brands are seeking to get in on the action.

Industry experts told Footwear News that recent leasing activity in the retail sector is up at least 30 percent from the same period a year ago, a testament to renewed confidence in the consumer and the economy.

“Business is extremely strong,” said Joanne Podell, EVP of retail at real estate brokerage Cushman & Wakefield. “Many brands are looking at the strength of the New York economy, demonstrated by tourist arrivals and [the fact that] employment is pretty good here.”

The shoe business, in particular, is white hot, thanks to major retailers including Saks Fifth Avenue and Macy’s revamping and expanding the footwear departments in their flagships. A number of brands are also hoping to dive into retail, and the good news for them is that some prime smaller spaces are coming online.

“By the end of the year, we will see a dozen new shoe stores just in Manhattan, three of which are European labels: Gina and Anya Hindmarch from the U.K. and Sarah Pacini from Belgium,” said Faith Hope Consolo, chairman of retail leasing and sales at Prudential Douglas Elliman.

One major corridor experiencing a huge rally is Madison Avenue, which has seen asking rents climb to about $1,050 per square foot in the second quarter after dipping below $800 per square foot in the same quarter of 2009, according to Cushman & Wakefield.

Players bowing stores on that strip range from stalwarts seeking to expand their empire to emerging players searching for a foothold in the Big Apple. New kids on the block include Brian Atwood and Brazilian brand Schutz, while contemporary labels such as Proenza Schouler, Kate Spade, Yigal Azrouel and Rag & Bone are migrating north from the downtown area.

“We can adapt to both [sensibilities],” said David Neville, co-designer of Rag & Bone. “We’re probably a little more downtown in our DNA, but the uptown girl is definitely wearing Rag & Bone. Now she’s got a store nearby.”

Deborah Lloyd, president and creative director of Kate Spade, said now is the right time to strike because “we are experiencing such an exciting period of growth and expansion. Despite the economic challenges of the last couple of years, our business is very healthy.”

Meanwhile, Alexandre Birman, founder of Schutz, said, “[Our] strategy is to go very fast. Based on what we see, we are going to develop a rollout plan [for additional locations].”

Sharing Schutz’s bullishness is Stuart Weitzman, who will open 10 domestic doors through 2014, including a fifth Manhattan location in Soho early next year. He told FN, “The principal driver [for opening] a new store for us is [to] nurture the specific opportunity available.”

Also spurring the uptick in activity, Podell noted, is the fact that “people follow one another. It’s about critical mass.”

Even mid-tier and overseas names are muscling in on prime spots. British retailer Kurt Geiger, which earlier this summer bowed its first store on Stockton Street in San Francisco, will imminently open a second door around Madison Avenue.

Amira Yunis, senior retail broker at CBRE, said Manhattan is the obvious choice for a stateside debut because “so many people want to be in New York and shop in New York. Brands are seeing the value of being here to get their name out there.”

Other players hunting for space include Crocs, DSW, Vince Camuto, Shoe Sensation, Brazil’s Melissa, Spain’s Camper and athletic players Nike and New Balance, brokers said. Boston-based The Tannery is eyeing some real estate near Union Square, where, incidentally, a spot will soon be made available by Shoe Mania’s recent bankruptcy filing.

Tarek Hassan, co-owner of The Tannery, said, “We would like to open in the Union Square area. We’re looking for spaces that are about 15,000 or 20,000 square feet.”

Among downtown retail hot spots are Soho and Tribeca, where Matt Bernson recently debuted his first store. Sam Edelman, who unveils his Soho flagship next month, said, “I don’t think we’re in an economic environment that’s anything but fantastic. People are feeling it is an opportunistic time to open really special retail concepts. Our store will be a fantasy for my customer and how she’d like to live.”

Meanwhile, the evolution of the Meatpacking District is one to watch, with more mainstream brands such as Ugg Australia and Patagonia becoming neighbors with specialty retailers including Jeffrey and All Saints.

“Downtown is interesting,” noted Podell. “Robert Clergerie is a very good shoe guy, and he’s opening in Chelsea, near the High Line along the West Side Highway. What it says is the market is going to get bifurcated [between traditionally strong areas and experimental new ones]. The folks that are looking at opportunities are looking everywhere.”

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