Clothing retailer Aeropostale will close its Times Square flagship store after filing for bankruptcy this week, giving back around 19,000 square feet of prime Broadway retail space to landlord SL Green Realty.
The store at the base of 1515 Broadway, a 54-story office tower between West 44th and West 45th streets, is one of 154 locations in the U.S. and Canada that Aeropostale will shutter after filing for Chapter 11 bankruptcy protection Wednesday.
It is not yet clear when the retailer will vacate the Times Square space and whether it will pay SL Green a penalty or termination fee to do so, according to Crain’s. But Aeropostale’s departure will give the real estate investment trust a sizable vacancy in the high-traffic Times Square shopping corridor, where retail rents have escalated as high as $2,000 per square foot for prime space.
In addition to 1515 Broadway, Aeropostale will also close its Downtown Brooklyn store, at 472-474 Fulton Street. U.S. store closures are set to begin May 7, with Canadian stores shuttering starting May 9.
According to Crain’s, the upcoming vacancy at Aeropostale’s Times Square store adds to an ever-increasing inventory of retail space both in the neighborhood and Manhattan at large – with rising rents, in particular, starting to hurt retailers.
Clothing store Express, for instance, is rumored to be considering subleasing its 30,000-square-foot retail flagship at 1552 Broadway – a location it reportedly pays north of $20 million for annually.
“The high-value corridors like Times Square, Broadway in Soho, the Meatpacking District and Madison Avenue have all seen rents rise to a level where it curtails demand,” according to Cushman & Wakefield vice chair Gene Spiegelman, who oversees the brokerage’s national retail leasing operation. “Retailers want to be here, but you need equilibrium back.” [Crain’s] – Rey Mashayekhi