Over the past decade, if you have been a top Fifth Avenue-area retail tenant rehabilitating your space within the tony shopping district, it’s likely you have opened a temporary storefront at a small building, 3 West 57th Street, just west of Bergdorf Goodman.
Top retailers Chanel, Coach and Bulgari have rented the retail space in the 12-story building owned by Kamram Hakim’s Hakim Organization, while they renovated their nearby flagship stores.
Today Lori Shabtai, executive vice president at the retail brokerage Winick Realty Group, is leading a team representing the three-level space, now occupied by Salvatore Ferragamo, on a short-term lease while Ferragamo’s 655 Fifth Avenue location is reconfigured. But the next fashion store expected to move in, some retail insiders say, is Louis Vuitton, the luxury fashion retailer located steps away at 1East 57th Street, at the corner of Fifth Avenue.
Several store brokers could not recall a building that has been used so often by high-end retailers as a temporary site while a main location was rehabilitated.
“We really do have a little niche,” with the building, said Adam Brodsky, director of commercial properties for the building’s owner the Hakim Organization. Brodsky and Shabtai declined to identify which tenants were looking at the building or the asking rent, but Brodsky said luxury companies were looking to do both long-term and short-term deals. An executive from Louis Vuitton did not immediately respond to a request for comment.
The prior luxury retailers at the building have stayed between four months and just over two years, Brodsky said. Ferragamo’s lease is ending “very soon,” but he would not specify exactly when.
The asking rent for the three-level retail space at 3 West 57th Street is between $400,000 and $450,000 per month, according to retail sources, for 4,000 square feet on the ground floor, 3,700 square feet for the lower level and 3,400 square feet for the second floor. That would equate to between $1,200 per foot and $1,350 per foot on the ground floor.
Patrick Breslin, an executive vice president for global retail at commercial firm Studley, said although that price is higher than most retail rents in Manhattan, it’s a good value for space just feet from Upper Fifth Avenue, where Cushman & Wakefield shows asking rents reaching $2,388 per foot at the end of 2011.
“It’s proven a really good deal for [luxury] retailers,” he said, who want to remain near their under-construction high-rent stores. If they don’t open a close-by store, retailers can “lose an enormous amount of cash flow. For the short term, the solution of the pop-up has become a friend to retailers and landlords.”
In 2007, Louis Vuitton, which owns its flagship store at 1 East 57th Street, bought the neighboring building at 743 Fifth Avenue, where retailer Gilan Jewelry had been located. Louis Vuitton, owned by Paris-based LVMH, is currently quietly demolishing 743 Fifth Avenue, and plans to expand the larger building into that space, according to insiders and city Department of Buildings records. For some portion of that time, the flagship store will need to relocate at least some of its retail to 3 West 57th Street, sources said.