By Jeffrey Roseman
President & Principal
Newmark Grubb Knight Frank Retail
It was early 2000 and we had just completed another tour of New York City with Austin based Whole Foods, which at that time was the best supermarket that no one on the East Coast had ever heard of.
We were now going on our 5th year of showing them around Manhattan, looking at every available site trying to extol the virtues of why they needed to be here and how potentially lucrative the New York City marketplace would be to them.
And while interest on their part was indeed growing, we would always get the same response, “We really hate to deviate from our standard box of 60,000 s/f on one leve … with parking.”
With Parking??? Really. Oh, brother!
I realized how difficult a proposition this was going to be, but as luck and perhaps fate would have it, they finally got the nerve up, and we were able to make a deal for them on 7th Avenue and 25th Street in Chelsea, and you know what happened next?
The doors flew open and people came by the busload and the registers started ringing and never stopped. The next search for the second store started about two weeks after the opening.
Fast forward to today and not only do they not need the “60,000 s/f boxes on one level with parking” anymore, but now have taken spaces two levels below grade and two levels above grade in some of the most unconventional retail spaces in Manhattan — and continue to shatter sales records for supermarkets.
In defense of Whole Foods, their position before entering the NYC market was not unique. The thought of NYC scares the bejesus out of most retailers who are not here. But they all understand, that if they are to be a retail brand to be reckoned with, at some point they must open in the Big Apple.
What is it about New York City that is so daunting for some chains that they are unable to commit?
Clearly New York City, Manhattan specifically, is not the ideal place for a retailer who is used to large white boxes with large storefronts, high ceilings and private loading docks.
The truth is, as recently as 15 years ago, retail in NYC was still an afterthought for most developers. It was merely the ground floor of the new office tower or apartment house that they were building above, and paid no mind to the layout of the ground floor.
This explains why your typical store in NYC has way too many columns, way too low ceiling heights, not enough storage and zero loading docks. Loading docks. Are you kidding??? We load through the front door here in NYC between the hours of 3 and 5 a.m. So get used to it!
But for the retailers who have taken the plunge, in spite of not being able to build their typical store, NYC has been undoubtedly the best business move that they have made.
The list is too long to mention in its entirety, but if you asked companies like Abercrombie and Fitch, Forever 21, J Crew, The Gap, The Guitar Center, Uniqlo, H & M, Urban Outfitters, Uggs, Chipotle, McDonald’s and Guess, amongst many others, about the top performing stores in their chain, virtually all of them would point to their NYC locations. Yet there remains a huge group who stand on the outside of the swimming pool, regularly dipping their toe into the water, waiting for that perfect box with the perfect rent to magically appear.
The NYC landscape is full of retail companies that have come to Manhattan jumped in with both feet, boldly making a decision which they have never looked back on.
