The Real Deal New York

Minskoff’s 51 Astor is an office leasing success story — but its retail lies empty

Storefronts have languished vacant since 2013

May 06, 2015 02:05PM
By Tess Hofmann

51 Astor Place in the East Village (inset: Edward Minskoff)

51 Astor Place in the East Village (inset: Edward Minskoff)

The office component of Edward J. Minskoff Equities’ 51 Astor Place hit full occupancy last week, capping an extremely successful leasing run for the $300 million spec building. Minskoff managed to lure tenants ranging from hedge funds to IBM and score record rents for the area.

The Fumihiko Maki-designed building’s retail component, however, is a different story. Spanning nearly 24,000 square feet in the heart of the East Village, it has sat empty for nearly two years.

The question of why is not entirely clear. Listing broker Patrick Smith of SRS Real Estate Partners said that the angular building presented a “bit of a puzzle” in terms of space configuration and said that Astor Place represents an “emerging retail corridor” that is forced to fill the gap between more popular retail destinations such as Union Square and Soho.

“If a tenant is in Union Square, or if they’re on Lafayette, Broadway or Prince, then they’re not going to be here,” Smith said. He added that the ventilation in the space was not built to support a restaurant, eliminating that possibility.

Asking rent for the retail space is $350 per square foot for the ground-floor level, which holds about 12,500 square feet, and $125 per square foot on the lower level.

SRS is the second brokerage to attempt to lease the space. RKF had the listing when leasing launched, but Minskoff said he decided to switch brokerages because he felt that RKF was overly busy and not able to give 51 Astor Place enough attention. Representatives for RKF did not respond to requests for comment.

But according to the developer, the lack of retail activity at the space isn’t about marketing. His policy, he said, is to hold off on leasing retail space in an office building until the office portion is 90 percent full — a threshold that 51 Astor crossed in December with the signing of hedge fund Tudor Investment Corporation. 

“I’m more concerned with leasing office space than retail space,” Minskoff said. “What happens if I put ABC in there, who’s in direct competition with XYZ, who wants 100,000 square feet of office space, and ABC’s only taking 7,000 feet of retail?”

Three of the five retail spaces currently have leases out and they are in active pursuit on the other two — seeking a specialty fitness and a food tenant that sells prepared meals, according to Smith.

Minskoff claims that Smith’s assessment of the leasing situation is modest, and that they are in fact finalizing leases for 100 percent of the retail space, to be announced within 30 to 40 days.

The developer has a history of optimism. The Real Deal reported in April 2014 that he believed the last of the office space would be spoken for within 50 days — a milestone that was not in fact reached until IBM expanded its lease last week.