By Liana Grey
Developer Joe Sitt compares site selection to spinning a roulette wheel. “If opportunity isn’t there, I move on,” he told an audience of brokers and landlords, who gathered in a vacant storefront at 1095 Sixth Avenue to hear the latest market trends.
A year and a half ago, Sitt took a gamble on London and purchased Burlington Arcade, a historic shopping center, when the price seemed right.
“Suddenly, London became very expensive,” he said during the annual Bisnow Retail Summit last Thursday.
So Sitt moved on to 693 Fifth Avenue in New York, which he also believed to be undervalued at the time, and is now active in San Francisco, Chicago, and Dallas.
But the five boroughs — where Sitt grew up — remain high on his list. “In the New York area, there are tremendous opportunities,” he said. Big box and discount retailers like Walmart, TJ Maxx, and JC Penney are hunting for space in both Manhattan and the outer boroughs, where sales potential is tremendous.
“They needed access to urban markets,” said panelist Adam Ifshin of DLC Management. “They think they can do the same volume” with smaller storefronts. Staples, for instance, has been leasing space in the 14,000 to 18,000 s/f range.
At the same time, niche retailers like LuLu Lemon, an upscale athletic wear shop that offers free yoga classes on weekends, and small citywide restaurant chains (think Mario Batali’s Eataly and Otto) are booming — in part because tourists flock to New York for its one-of-a-kind boutiques and cafes.
What’s key is taking a chance on the right block. “New streets have emerged in Brooklyn,” Sitt said, including Franklin Avenue in Bedford Stuyvesant and Bergen Street, which stretches from Cobble Hill to East New York. Haim Chera, principal of Crown Acquisitions, called Fordham Road in the Bronx a “tremendous shopping district,” with plenty of unmet demand.
The two-mile thoroughfare, which runs through University Heights, Fordham Heights, and Belmont, is lined with a mix of independent discount shops, including Fantacia Beauty Supply and Sneaker Plaza, and national chains like The Gap, which opened several years ago.
As for prime Manhattan, the stretch of Broadway between Houston and Grand Streets, one of SoHo’s haute couture corridors, is sizzling. “Even the side streets are really filling in,” said Karen Bellantoni of Robert K. Futterman.
When Sitt took a walk down Broadway recently, he didn’t recognize many of the Swedish and Japanese brands that have popped up in recent years, including the popular clothing shop Uniqlo. “Bottom line, it’s going to be global retailers,” he said of the neighborhood.
Madison Avenue, too, has undergone a makeover as storefronts left vacant by the recession fill up, Bellantoni said. But she cautioned against blocks further east.
With little traffic from tourists, First, Second, and Third Avenues in the 60s and 70s have fizzled, she explained. And then there’s the matter of the ever-spinning roulette wheel. “You want to be at the forefront of evolving markets,” said David LaPierre of CBRE.
