The opening of the new Tiffany flagship this month at 727 Fifth Ave., and the forthcoming new Rolex Tower at 645 Fifth Ave., are part of a retail resurgence in Manhattan.
LVMH is leading the way, planning an all-new building for the northeast corner of Fifth Avenue and East 57th Street that will become a glamorous new Louis Vuitton flagship.
Multiple sources tell The Post that LVMH has organized a “beauty pageant” and interviewed “starchitects” to find out who will design the next generation of flagship offices and retail for Louis Vuitton.
That’s one of the reasons it signed a seven-year lease with Donald Trump to rent the 65,000-square-foot former Nike spot at 6 E. 57th St., which its own-brand Tiffany’s is now leaving as it returns to its redeveloped flagship. at The Landmark at 727 Fifth Ave.
LVMH plans to completely demolish both the current and narrow 19-story Louis Vuitton building, once home to the crazy Warner Bros. store, along with the smaller adjoining building to the north at 743 Fifth Ave., now occupied by the watch brand Hublot.
“They saw what Rolex is doing at 665 Fifth Ave. and want to create something just as new and important,” said a source who asked for anonymity, of David Chipperfield Architects’ new 21-story design for Rolex that is now on East 53rd Street is running.
Louis Vuitton’s corner location has no height limit, experts say, and could be developed by right with at least 122,700 square feet and perhaps nearly twice as much.
According to land use consultant Brian Stout of TRIZ Advisory, “Any potentially larger new building should just meet the requirements for light and air as you go higher.”
LVMH could also obtain transferable air rights from other properties, including the adjacent landmark at 5 E. 57th St. leased by its competitor from Kering, Yves Saint Laurent.
To come up with a project of about 230,000 square feet, Tenantwise’s M. Myers Mermel, who also advises on air rights, suggests that LVMH could add a Soho House-style club, restaurant and luxury spa in addition to a store and offices. replace others that have closed nearby.
“An isosceles triangle tower floor slab could provide a straight-line view of Central Park for the restaurant, spa and hotel as its northern neighbor is above the 14th floor,” added Mermel of a new project with a potential height of about 34 feet. stories. “The easiest way forward is just another stone blob to contain only a block of shops, the solution that has been favored in that environment for the past century,” Mermel continued. “Let’s hope LVMH chooses to send us into the 21st century.”
One of the biggest retail transactions this year was Louis Vuitton’s lease with Trump to take over the 65,000-square-foot former Nike space at 4-6 E. 57 St. for seven years — according to sources who told The Post, a lease was of $20 million – while the Louis Vuitton and Hublot buildings are demolished and rebuilt as one tower.
The fashion house’s sister company LVMH, Tiffany, has sublet the space connected to Trump Tower as it completes the redevelopment of its own store on the southeast corner of Fifth Avenue. The grand opening is now scheduled for April 28.
In a similar vein, Burberry leased 14,700 square feet at 693 Fifth Ave. — formerly Valentino — while the store at 9 E. 57th St. is being renovated.
Retail in general is experiencing a resurgence as brands have captured better locations due to better pricing and vacancy rates due to COVID lockdowns.
“Across the board, prices have stabilized,” says Cory Zelnik of Zelnik & Co.
In the first quarter of 2023, a new CBRE report found that the number of available ground floor stores in 16 prime aisles fell 7.2% from the end of 2022 to 206 spaces, down 16.6% year-over-year. Leasing was up 5.4% from the previous quarter and 14.5% year-over-year.
But as vacancy rates eased, prices began to recover from the lows of the pandemic with average asking rents now at $638 per square foot, up 3.7% from the previous quarter and 8% higher than a year ago.
Nearby, Zadig & Voltaire leased a 12,000-square-foot triplex for its headquarters and retail store at 515 Madison Ave. While further north, the luxury corridor from East 57th to East 72nd Street fills up quickly. “If it’s not open yet, you’ll see a sign that it’s coming,” Zelnik said.
Any second-generation restaurant “will rent in a heartbeat,” Zelnik added, regardless of area. “There is a huge entrepreneurial spirit [by restaurants].”
The 8,731-square-foot triplex with outdoor space at 87 Seventh Ave. South on the corner of Barrow Street that Sushisamba held for 17 years has finally been leased to a similar tenant from Japan.
The space was represented by Gregory Tannor and Jessica Gerstein and had an asking rent of $50,000 per month.
“Food and drink is extremely hot right now,” agrees Brad Siderow of Douglas Elliman, who represented the Japanese tenant. “I encounter spaces with multiple parties circling the wagons.”
Aware that central office spaces only support a three-day work week, restaurants are cutting deals based on that business. “It’s 3.5 days a week… with a half day on Monday or Friday,” says Newmark’s Jeffrey Roseman. But Roseman says the owner of a QSR — Quick Service Restaurant — said while business is down 10% to 20% Monday and Friday, he’s up 15% to 20% the other three days of the week.
Now that the tourists have returned, the Meatpacking District, Soho and Times Square have all remained strong.
Represented by Charlie Conover of Odyssey Retail Advisors, Australian skincare and home care company AESOP, now being purchased by L’Oreal for $2.5 billion, leased 1,700 square feet at 60 Gansevoort in the Meatpacking District, with an asking rent of $500 on foot.
Aurora’s Jared Epstein, who owns the property with William Gottlieb Real Estate, declined to comment on that transaction, but has moved most of that stretch between Ninth Ave. and Washington, including Pastis and Bally, redeveloped.
In 2022, 4.5 million people walked the block, he said, with pedestrian activity already up 50% this year.
In Soho, Epstein is seeking a new tenant for the 20,000-square-foot duplex store now occupied by Forever 21 at 568 Broadway, which even has a rare escalator. “We hope to put on something fresh and new,” he said. Asking rent is $3.5 million per year.
Nearby, H&M secured 18,000 square feet for a new outpost at 591 Broadway.
“Soho remains a juggernaut,” noted Peter Braus of Lee & Associates NYC. His firm represented the owners of 119 Spring St., who leased the store to eccentric German fashion designer Philip Plein. “He is a very prominent designer and the store is in the middle of the neighborhood and is indicative of what is going on in the market which is seeing a continued influx of national and international tenants.”
Rich Johnson and Gabriel Paisner of Odyssey Retail Advisers represented Plein, who previously had a Soho pop-up at 40 Mercer St. and a larger store at 625 Madison Ave in 2018. the hills of Bel Air.
“We were on Spring Street for this space and we couldn’t walk side by side because there were so many people,” Paisner recalled of the space journey. Philipp stopped and said, ‘This is monster foot traffic’ and I said, ‘That’s because you’re in the heart of Soho.
Similarly, Greg Kraut of KPG Funds said he has multiple tenants visiting their retail spaces in Soho. “Retail is on fire, there’s a renaissance going on,” Kraut said.
In Noho, a “Small is Beautiful, Miniature Art” pop-up opens at 718 Broadway between Astor and Waverly Places featuring small works by 32 international artists through August. The lease for 16,500 square feet was made directly with the owner of the retail cooperative, Ivan Hakimian.
Multiple health users also think it’s a good time to get deals on storefronts. For example, the Vet Hospital, Goodvets, leased at 544 Hudson St. in the West Village and at 125 Montague St. in Brooklyn Heights.
Ike Bibi and Carolina Aziz of Kassin Sabbagh Realty represented Hakimian in a 2,500-square-foot lease for a different kind of health care business: the tattoo removal chain, Removery, at 4 W. 21st St. in the Flatiron.
In another Flatiron deal, e-commerce luxury mattress company Saatva leased 6,700 square feet at 873 Broadway between East 18th and East 19th Streets.
In other major leasing news, J. Crew revamped its 27,000 square feet at 91 Fifth Ave. and Abercrombie & Fitch leased 6,700 square feet at 139 Fifth Ave.
A summer pop-up has now opened in Hudson Yards featuring Korean K-Pop band BTS, sure to draw crowds downtown that have yet to find a retail or office occupier for the multi-story Neiman Marcus space.
Jack Terzi, of Jack Terzi Real Estate, which owns properties in four boroughs, said: “We are negotiating letters of interest with tenants and trying to make win-win deals for everyone.”
In Brooklyn, Williamsburg has few good spots left, while in Queens, says Zelnik, Continental Avenue and Austin Street in Forest Hills are “rickety” with rents around $150 a foot and in some cases a little more.
Since cannabis is still illegal at the federal level, Rob Gilman, partner and co-chairman of the Anchin real estate group, recommended contacting lenders before renting to such a tenant. “Cannabis is becoming a bigger business,” he noted, and could boom if legalized by the FBI.
Helmsley Spear’s Gary Levy and Randy Sherman have a number of cannabis clients looking for spaces in the city, as well as Westchester, Long Island and the state. “Every municipality and city is trying to navigate the rules,” Sherman said. “If there is a space available, it should not be near a church or school and that is part of the footwork. We are scouring the market as we believe the next round of permits will be issued within a reasonable timeframe.”