A stretch of Soho comes
into its own

Lower Sixth Avenue sees new building as neighborhood expands

Dec.December 01, 2014 07:00 AM
The view from One Vandam, one of the buildings going up on the western edge of Soho.

The view from One Vandam, one of the buildings going up on the western edge of Soho.

The southernmost leg of Sixth Avenue has been more of a place to pass through than to visit since the 1920s, when the city blasted subway lines through parts of MacDougal and Sullivan streets, then covered the tracks with a new roadway.

And developers may have been dissuaded from doing anything about that. The massive infrastructure project left the road, formally known as the Avenue of the Americas, lined with castaway lots whose odd shapes discouraged construction.

But as Soho’s retail hub balloons, and Hudson Square becomes a viable office district, the avenue is getting squeezed from both sides, and developers are giving the skinny stretch a second look. A shortage of buildable land downtown is also playing a part in the area’s growing popularity, observers say.

Several major condo and office projects are now underway on the strip, which is hung with rusted medallions from the Latin American countries that gave the thoroughfare its official name.

To be sure, the area is still something of a bargain for the neighborhood. Retail rents on West Broadway, where most stores are located, are about $400 a square foot, brokers say. That’s less than half of the cost on prime Soho blocks closer to Broadway, where the going rate is nearly $1,000 a foot. 

Then again, 1 Soho Square, a stylishly revamped former factory complex that will ask $80 per foot for office rents, is mounting credible competition to the top of the market in Hudson Square which contains the bulk of the neighborhood’s offices.

Still, with the infusion of new residents, office workers and shops, it may not be long until the western edge of Soho and Hudson Square are virtually indistinguishable, said Margie Sarway, the director of Sinvin Real Estate, a retail-focused brokerage on nearby Varick Street.

“Hudson Square used to be considered Soho,” Sarway said, referring to a decade ago, before the neighborhood had its own moniker. But re-unification could be imminent, she added: “If they keep spreading, eventually they’re going to meet.”

Below, The Real Deal looks at the area’s most notable projects.

1.  10 Sullivan Street  

Among the splashy new condos rising here is this flatiron-shaped version on a trapezoidal lot at Broome Street, developed by the team of Madison Equities and Property Markets Group.

With 19 units in 16 stories, plus 4 adjacent townhouses, this project is on the site of a former car wash and required a zoning change, as its block had been designated for industrial use.

On a recent afternoon, five floors were out of the ground in the tower, which will be tawny brick and have a rounded point, facing Downtown. The project is supposed to be completed next year.

A message left with their sales office was not returned. But 10 of the 14 units that have hit the market since summer have sold, according to StreetEasy, the real estate website. The least expensive, a two-bedroom with two baths and 1,200 square feet, was about $3 million.

Retail will take up 10 Sullivan’s base, brokers say, but details about its size and configuration were unavailable.

Despite the arrival of boutiques, the neighborhood sorely needs a well-stocked grocery store, especially considering its new residential cast, Sarway said. “It’s really just bodegas now.”

2.  166 Avenue of the Americas

At this corner, at Spring Street, the not-for-profit God’s Love We Deliver, which serves meals to people who are ill at home, is expanding its existing headquarters while also capitalizing on newfound interest in the area.

The charity moved to the site after buying a red-brick two-story, 18,000-square-foot building for $570,000 at a city auction in 1993. Now, it’s enlarging that building to five stories and 48,000 square feet which will include a kitchen that, at 5,800 square feet, will no longer be in a basement but on the window-lined second floor. The charity serves about 1 million meals a year but is expected to serve 2 million with the new facility.

At $26 million, the bigger, gray-toned headquarters will not come cheap. But Michael Kors, the fashion designer, kicked in $5 million, which earned him naming rights; the city contributed $8 million.

In a controversial move, God’s Love also sold $4 million in unused development rights, or air rights, to One Vandam, the 14-story BKSK-designed condo next door (see “180 Avenue of the Americas,” below.) Even though the site has a deed restriction on it, meaning it can only be sold to a not-for-profit, the air rights had no such limit in place.

Still, to fulfill requirements triggered because of One Vandam’s larger-than-typical size, the condo had to have some public space outside the footprint of its building. The city-approved solution is to give residents access to the 3,400-square-foot multi-level garden on God’s Love’s roof, which was covered in that purchase of air rights.

The outdoor space, which will have an herb garden, will also be used by the charity’s workers.

3.  186 Spring Street 

This corner parcel, which once contained a deli, as well as a townhouse belonging to Adam Horovitz of the rap group the Beastie Boys, is now being marketed for a 12,500-square-foot store by owner Waterbridge Capital, which would presumably build a space once it secured a tenant.

The site, which has changed hands a couple times in recent years, is not being targeted for any condos, however, according to a woman who answered the phone at Waterbridge, but declined to provide any more information. Asking rents were similarly not available.

Previously, developer Stephane Boivin assembled the site, paying $10 million for the corner parcel and about $6 million for Horovitz’s building, which was razed. The plan during that go-around was to put up a mixed-use condo-retail complex, according to news reports.

In general, trendy streets like Broadway and Greene are among those in Soho that can fetch more than $1,000 a foot for their stores, which is what Prada paid in 2013 to renew its lease at 575 Broadway, at Prince Street. But rents drop off considerably just a few blocks west, with about $400 a foot charged on West Broadway as mentioned, and $350 on side streets like Prince and Spring nearby, brokers say. 

Redevelopment interest in Soho’s western flank comes amid major turnover. For instance, diagonally opposite No. 186 is Metropolitan Lumber and Hardware, whose entryway at 175 Spring, with a tall stone arch, has been a familiar sight in the area for over a century. That 10,400-square-foot site, which is not landmarked, is now also on the market for lease.

4.  180 Avenue of the Americas 

This 14-story limestone-and-glass condo, which is being marketed as One Vandam, includes 25 one- to five-bedrooms, including penthouses.

Developed by Quinlan Development Group and Tavros Development Partners, the wedge-shaped building is about 70 percent sold after a year, said Sean Murphy Turner, the Stribling & Associates agent handling sales.

And with bleached walnut cabinets and Celador counters, the apartments have sold for prices that start at about $2,000 a square foot, according to StreetEasy.

The building, which purchased air rights from the adjacent God’s Love We Deliver charity (see “166 Avenue of the Americas,” above) to add extra stories in a low-slung area, will be connected to the roof garden of that building by short stairway as part of a zoning agreement, Turner said. But, she added, One Vandam’s residents will most likely instead use a 6,400-square-foot wraparound terrace in their own building, which God’s Love employees will not be able to access.

One Vandam will also have a 14,000-square-foot storefront, which will probably be divided into two berths, Turner said. A resident of Tribeca for years, Turner added that it barely surprises her any more that these types of once-unremarkable places are now getting attention. “You build an amazing building, and all of sudden, you’ve put a stamp on an area,” she said.

5.  233 Spring Street/161 Avenue of the Americas

Channeling the buzz in Hudson Square, which has seen its printing plants converted to offices for tech and media tenants in recent years, these adjacent buildings are remaking themselves as 1 Soho Square, a luxury office complex.

Named for a modest park across the street (a space that the local business improvement district group has plans to

fix up), 1 Soho Square, whose landlord is the team of Stellar Management and Rockpoint Group, has several components.

The first is No. 161, a 13-story brick Beaux-Arts building known as the Butterick Building, where dressmaking patterns were once printed. In more recent years, it was known for its ground-floor tenant, a large Janovic paint store. Completed in 1903, the building is being upgraded as part of the development plan, and an additional retail tenant will be added on the north side, though Janovic will stay put.

The other main section is No. 233, an industrial 1926 building that’s also getting revamped with the addition of three penthouse levels, for a total of 13 stories. The building will also feature 10 terraces, reachable directly from offices through tall glass doors.

Aveda, the beauty products company, will relocate from the ground level to 20,000 square feet on the second floor, which will allow the complex to boost its retail offerings.

A half-acre of shared outdoor space will also be installed on the roof.

Going up between the two main buildings, in a former loading dock area, is a 19-story glass tower that will contain elevators; existing elevator space will be converted to offices. The sandwiched-in structure will also contain a new, two-story lobby.

All told, there will be 768,000 square feet of office in the two revamped buildings, said Jodi Roberts, a director at Cushman & Wakefield in charge of leasing. About half of that is leased, including several existing tenants that are remaining.

New tenants include the eyeglass company Warby Parker, which will move from the Puck Building in Soho to a three-floor, 80,000-square-foot space at No. 161 and is already partly in place.

Asking rents at 1 Soho Square, which will be completed in January 2016, are about $70 a foot for offices without a terrace, and $80 a foot for space for those with a terrace, Roberts said.

In contrast, Trinity Real Estate, the arm of downtown’s Trinity Church that owns most of Hudson Square, was asking $75 a foot at 1 Hudson Square at 75 Varick Street — Trinity’s priciest tower — in mid-November.

Yet tech, fashion and hedge-fund tenants will likely fork over extra for 1 Soho Square’s amenities, Roberts said. “I think outdoor space is just incredibly in demand these days,” she said. “It’s all part of trying to make the workplace more fun.”

6.  452 West Broadway

Thor Equities, a major Soho landlord with several properties along Broadway and Greene streets, is also getting into the action to the west.

Earlier this year, Thor, whose chief executive is Joe Sitt, paid $6 million for this 2,200-square-foot building near Prince Street. The narrow three-level building, which has huge windows, is now for lease for about $370 a square foot. Since the 1990s, it contained a boutique called Philosophy, which offered lower-cost fashion from designer Alberta Ferretti.

The retail mix is changing on West Broadway, which was also known for being a slightly down-market cousin to Soho’s eastern blocks, said Grace Yang, a Thor leasing agent. 

Moleskine, the stationery company, has an outpost; as does Leica, the German camera-maker. Ladurée, a pastry shop, opened a few months ago, at No. 398, where Barolo Ristorante had been before.

“It’s not quite as commercialized with national chains like Broadway,” said Yang, who added that the condos and offices would help generate customers. “Any time you add new bodies to the neighborhood, it’s good.”

7.  402 West Broadway

A recent deal at this space may let the air out of West Broadway’s claims to affordability.

DSquared2, a cutting-edge fashion company owned by twin brothers Dean and Dan Caten, inked a lease at this well-kept corner brick building for $750 a square foot, a neighborhood high, brokers say. The space, which has yet to open, spans three levels and 2,200 square feet. 

Sarway, of Sinvin, which represented the building, said it’s not like West Broadway lacks chains — DSquared2 has many stores around the world. However, she said, “they are higher-end and more international.”

8.  54 MacDougal Street

Most of Soho is protected by a historic district; another, the Charlton-King-Vandam district, covering the western side of Avenue of the Americas, keeps other blocks off-limits to development.

It may be expected, then, that developers have zeroed in on the few parcels in between the two districts where structures can be torn down. One, at No. 54, had for years contained a three-story brick building; it was also staged to look like a jewelry store in the movie “Men in Black.”

In 2013, it met the wrecking ball. Ajax Investment Partners, the site’s owner, plan to put up a five-story apartment building, with four units and no retail, according to a filing with the Buildings Department. With permits in place, it’s to break ground this winter, according to a source close to the project.

An effort in recent years to landmark nearby blocks to stave off demolitions has been successful; the City Council approved two of three phases of the South Village landmark district. The third, which might have included No. 54, is now before the chair of the Landmarks Preservation Commission, according to Andrew Berman, the executive director of the Greenwich Village Society for Historic Preservation, which has pushed for the designations.

9.  101 Avenue of the Americas

An early bet by Edward J. Minskoff Equities that Sixth is more than just connective tissue between other, better neighborhoods may be paying off at this 23-story tower near Canal Street.

In 1991, Minskoff and partners constructed the building, which for decades had a single tenant, Local 32BJ of the Service Employees International Union. That union, though, moved out in 2011, around the time Minskoff bought out his partner, the Andalex Group, to take sole ownership of the building, which then underwent a $35 million renovation.

Today, the 425,000-square-foot high-rise, which is about 95 percent leased, according to news reports, has tenants like Regus, the office suite provider, as well as Two Sigma Investments, a hedge fund, according to reports. Huntsworth Health, a public relations firm, is on the 13th floor.

And this summer, cloud-computing firm DigitalOcean took 23,500 square feet at $75 a foot, The Real Deal reported.

Still empty, though, is the 2,000-square-foot ground-level retail space, which has 24-foot ceilings. Asking rents are $175 a foot, said Matt Ogle, a vice president of SRS Real Estate Partners, the brokerage marketing it.

Since this summer, a restaurant has looked at it, as has a children’s play space, Ogle said, who added that he’s “close to a deal.” 

“With the high prices in Soho, there are tenants on the move,” he added. “I think the area is poised for rent growth now, but in the next 5 to 10 years, it will be a completely different market.”

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