By Al Barbarino
When he joined the firm as an intern in 2003, his task was to take a picture of every building in the neighborhood, helping the firm transition to the digital world.
Today, as a director of leasing for the company, Gotch still walks every block and street corner in the neighborhood every six months, this time around speaking with shop owners and recording the number of retail vacancies and asking rents. The process takes about 100 hours over the course of a month.
“I’ve found that I’ve gotten great traction with this, so I’m happy to put the time and energy into it,” said Gotch, who has lived in the neighborhood for 10 years. “I’ve been talking to a lot of landlords in the neighborhood and they love knowing that this information is available because there’s largely no other place to get it from.”
The data provides landlords and the industry at large a micro-snapshot of the market’s fluctuations and has increased the firm’s exposure in the neighborhood, elevating it as one of the most trusted names in the area, Gotch said.
With traffic in Washington Square, the High Line (which ends in the Meatpacking District) and the presence of New York University, people are continually drawn to the neighborhood, Gotch said.
“The area on the whole is super popular as a destination in New York and in general,” he said. “The Village has the resident population and a great tourist population. I don’t see softening in the market in any way and I think everything is looking very good for the area on the whole.”
But the most recent data from June does provide some interesting talking points when compared to the last set of data from January, Gotch said.
The overall vacancy rate is up from 4.6 to 5.1 percent, and rents have risen from $164 to $170 psf. However, Broadway — confined by West Houston to the south and 14th Street to the North — has held steady around 7.9 percent, Gotch said. Meanwhile, Broadway rents have dropped from $224 to $186 psf.
“It may look only like a three percent (vacancy) difference, but really that’s almost 55% higher than the Village on the whole,” Gotch said.
“The rents have risen, or stayed essentially the same, except in the case of Broadway and a lot of that I attribute the buzz on the street that the office market is kind of tough, the building sales market seems to be doing okay, but that the retail market is doing great. This caused landlords to think they should raise prices, but we may see some absorption there now that they have fallen.”
Gotch also attributes the higher Broadway vacancies to what he called a “transitional moment” on the stretch of Broadway between 9th and 14th Streets, where larger tenants — Brooklyn Industries, Le Pain Quotidien, and Cosi, to name a few — are replacing antique dealers which were once a mainstay.
“My prediction for that area is that chunk from 9th street to 14th Street is going more in the direction of bigger national tenants and it will be interesting to see if that actually materializes,” he said. “With tenants like these, there could be a moment when we see some real strength coming into this corridor.”
Unlike Broadway, Meatpacking District vacancies fell from 12.2 percent in January to 7.6 percent in June, even as rents increased seven percent, from $275 to $292 psf. Gotch called this an “eye-catching item” item, attributing it largely to a temporary outflow of retailers early this year and late last year.
“There was a whole moment about six months ago when [designer] Stella McCartney was quoted in every newspaper saying, ‘Oh the Meatpacking District is over and I’m moving back to SoHo — so see you later,’” Gotch said. “That created a little trend where a rash of tenants left all at once. But it seems like the exodus is over.”
An editorial Gotch wrote for the July 18, 2012, print edition of Real Estate Weekly noted another trend in the Village: some longtime owner/operators are considering calling it quits in order to capitalize on rising rents.
According to the editorial, one in 15 businesses is owner occupied in Greenwich Village. That might not seem like much at first glance, but it translates to roughly 226 out of a total 3,400 retailers in the neighborhood.
“I’m not sure if we’ll ever see them completely gone in that neighborhood,” Gotch said about owner/operators. “But it’s definitely impacting the neighborhood as things get more and more expensive, putting pressure on them.”
Gotch, who holds a B.A. from New York University, rejoined Massey Knakal in November last year as director of leasing after completing his M.B.A. at INSEAD (a France and Singapore-based business school).
Prior to graduate school, he managed the firm’s top producing team in four of the last five years, under partner James Nelson. He was involved in over 100 transactions with clients that include the Archdiocese of New York, Zeckendorf Development, The Lefrak Organization, Washington Square Methodist Church, and Beck Street Capital.
“For the longest time my significant achievements were the sales I’ve been involved with,” he said. “But since I’ve been back, I’ve not only signed three leases and have nine listings, but we have become the second or third most common broker in the area. That’s been a real tribute to the platform, the brand and the territory system that we have here.”
The three leases include 175 Bleecker Street, where a former jewelry store will become an art gallery/framing store; 511 West 20th Street, a storage space turned yoga studio; and 49 West 8th Street, a second floor sublet that will become an eyebrow-threading salon.
