UPDATED: Sept. 17, 1:30 p.m.: Lululemon Althletica signed a pair of leases late last month on two corners facing each other at Prince and Wooster streets in Soho. One will be the athletic apparel retailer’s first store just for men.
The men’s store will take space at 127 Prince Street, previously occupied by Lucky Brand, on the west side of Wooster Street. The women’s store was signed for 125 Prince Street, on the east side of the street, which is currently home to Spanish shoe retailer Camper.
The Lululemon deals underscore continued leasing strength in the Soho market, where there had been resistance to high asking rents on Spring and Prince streets.
“The market is extremely inflated in Soho with rents at all-time highs,” Robin Abrams, executive vice president at the retail-focused Lansco, said. “125 [Prince] and 127 Prince are both high-profile, highly trafficked corner sites on perhaps the most sought after retail corridor in Soho for fashion tenants.” She was not involved in the lease.
Asking rents for the stretch on Spring and Prince streets are from $800 per foot to $1,200 per foot, she said. In addition, the leases reinforce a view of Soho as a kind of outdoor mall, with related stores near each other. Other brands, including Kate Spade with a Jack Spade a block away have multiple stores in Soho. But those shops are not on facing corners, and therefore not as prominent as Lululemon’s set up, insiders said.
“Many spaces on Prince Street are small and shallow, offering decent frontage but little selling space,” Jared Epstein, vice president at Aurora Capital Associates, which owns substantial property in Soho. “Lululemon made a brilliant move by seizing an opportunity to control two adjacent corners on Prince Street.”
The men’s store will be one of 47 new corporate-owned locations Lululemon plans to open this year. The Vancouver-based public company operated 270 stores world-wide as of the end of June 30, including seven in Manhattan.
The deal at 125 Prince is a sublease for five years with two five-year extension options at the base of the six-story rental apartment building owned by the Milgrom family. The sublease at about $800 or $900 per foot for approximately 2,400 square feet was signed with a family-affiliated company known as 125 Prince Street, Inc. that holds a long-term lease with the building that runs through 2041, according to a source and city records.
As an indication of how times have changed in Soho, property records show that 125 Prince Street, Inc., began paying an annual rent set at $18,000 per year, plus cost of living increases starting in 1981, for the basement, first and second floors.
Camper, the shoe retailer, will vacate the space at the end of October as its 15-year lease expires. Lululemon is planning to open the men’s store in late 2014.
The contract for 127 Prince — at about $700 per square foot — is a five year lease, sources said, and was made possible by an early lease termination for Lucky Brand, which had a year or more remaining. 127 Prince is a seven-story cooperative with about 1,880 square feet of retail at the base, PropertyShark data show. Another source close to the deal said the final deal was higher than $700, and was in the range of the asking rent, which was $1,000 per foot for the space measured at 1,500-square feet.
Lululemon was represented by RKF’s Jeremy Ezra, who acted as the broker at 125 Prince and an advisor at 127 Prince, sources said. He declined to comment other than to confirm he represented the retailer.
Stephen Tarter, a broker with Coldwell Banker Commercial Alliance, represented the landlord at 127 Prince.
Lululemon did not immediately respond to a request or comment.
“This is a bold move that will give [Lululemon] a prominent presence in Soho,” said Stephen Milgrim, an owner of 125 Prince Street, Inc.
During the company’s second quarter earnings call on September 11, Lululemon CEO Laurent Potdevin said the locations facing each other would increase the brand exposure.
“To further elevate our guest experience and global brand awareness, we are relocating our Soho store in New York and opening both men’s and women’s standalone locations,” he said on the call. “This will provide unique experiences for both men and women in spaces that are designed uniquely for their needs.”
Correction: A previous version of this story reversed the locations of the men’s and women’s stores.