Retailers seize low rent opportunities in NYC

By Michael Stoler | September 01, 2009 12:30PM

If you are a national or international retailer, it is your objective to operate a retail store in New York City, with Manhattan remaining the prize location. And in the down market, more national chains are capitalizing on lower rents.

On July 31, Texas-based J.C. Penney opened its first Manhattan location at the Manhattan Mall. Later this year, residents of Manhattan will no longer have to travel to Astoria or Brooklyn to shop at Costco Warehouse Club. Costco is scheduled to open its long-awaited store in East Harlem at 116th Street at East River Plaza.
Joining Costco there is the inaugural location for Target.

Downtown, it’s finally official — Seattle-based Nordstrom announced it signed a lease to open a 32,136-square-foot Nordstrom Rack, the company’s off-price retail division. The store will be located at One Union Square on 14th Street. Shoppers will have to wait until spring 2010 for its grand opening.

In a Queens location that was slated to serve as New York City’s first Wal-Mart is the Rego Park II, Vornado Realty Trust’s 600,000-square-foot retail complex. The center will be anchored by a 134,000-square-foot Century 21 store, a 138,000-square-foot Home Depot and a 132,000-square-foot Kohl’s. Wisconsin-based Kohl’s operates 1,022 stores in 49 states and is scouting for locations in Manhattan. According to Reuters, the company has been looking for space in Union Square, the Ladies Mile and West 57th Street.

Later this year the second BJ’s Wholesale Club will be opening in the Bronx. BJ’s clubs are presently located in the Bronx, Queens and Brooklyn. Industry leaders believe that the wholesale club, with over 180 locations in 15 states, is scouting locations in all the boroughs, with particular interest in Manhattan. In November, BJ’s will be opening a 121,000-square-foot club at the shopping center at Sky View Parc on College Point Boulevard in Flushing. It will join Bed Bath & Beyond, Best Buy and another Target in the 800,000-square-foot shopping center.

As retail rents continue to decline in Manhattan and the other boroughs, expect to see retailers scouting for locations in the best urban market in the world, New York City.

Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.