Kenmare (left) was opened by Joey Campanaro (top) and nightlife guru Paul Sevigny (bottom)
First it was the Bowery. Now it’s Kenmare Street. The strip of retail, restaurants and mixed-used apartment buildings — which stretches from the Bowery over a few blocks to Lafayette, terminating with the iconic One Kenmare Square, codeveloped by Andre Balazs — started gentrifying about five years ago. But recently the activity and turnover there has ramped up.
Once a forgotten continuation of Delancey Street, Kenmare was home to parking garages, auto mechanics, run-down bodegas, and psychics. But new restaurants and retailers are now opening alongside the parking garages and closed storefronts.
“There is a huge, dramatic change going on there on Kenmare Street,” said James Famularo, managing director of retail at New York Commercial Realty Services.
Famularo — who grew up in the area — has handled about a dozen restaurants on the strip in the last five years. He currently fields about 10 phone calls a day regarding Kenmare and areas nearby.
“With Kenmare, it was known first for the food,” Famularo said. “The coolness of the restaurants and lounges then brought in the retail boutiques. I’d say this is one of the hottest retail strips in Manhattan right now.”
Lynda Deppe — president and founder of Allsite Real Estate, which does commercial and residential, and has two Manhattan offices — said that Kenmare has benefited from the hipness of the Bowery.
“It looped around, and all these boutique shops from the younger generations started popping up,” she said.
Hip eateries like Travertine, Osteria Morini and the 2,400-square foot Kenmare — started by restaurateur Joey Campanaro and nightlife gurus Paul Sevigny and Nur Khan — have all opened in the past year or so. That was despite an aggressive community board making it difficult for restaurateurs to get liquor licenses.
La Esquina Taqueria
Travertine, for example, opened in the fall of 2009, when the community board finally offered its support, having opposed three earlier plans for the space.
“The community boards have to let businesses thrive. They cut everybody’s throat,” said David Zahabian, who owns the mixed-use 19 Kenmare building where Travertine is located. The restaurant leased the ground floor from Zahabian in 2008, but wasn’t able to open until late 2009.
Deppe said she is having problems with a few listings she’s trying to lease due to issues with obtaining liquor licenses. “We’re in a pause state at one location,” she said. “[The restaurateur] is going through the liquor license process now. If he gets it, he’ll be the new tenant. And he is a serious restaurateur.”
Like most of Manhattan, Kenmare retail rents are down about 20 to 25 percent from their peak at the height of the market, according to Famularo. He added that stores now go from $140 to $190 a square foot, depending on their location — the closer to Lafayette, the higher.
Famularo has multiple listings on the street, including a 2,000-square-foot space at 78 Kenmare Street and another space at 37 Kenmare. He was also the broker on Kenmare (the restaurant), which he said pays $130 per square foot, and Travertine, which pays about $80 per square foot. The reason for the price difference is twofold: location (Kenmare is in a more desirable spot closer to One Kenmare Square) and timing (the economy was rockier when Travertine signed its lease).
One 2010 retail report shows that average price per square foot for Manhattan retail space ranges from $125 to $225. But average rents are between $225 and $235 nearby on Canal Street, stretching from Wooster to Lafayette.
Kenmare’s lower rates are attracting more tenants, brokers say.
“There are a lot of leases being negotiated,” said Faith Hope Consolo, chairman of retail leasing, marketing and sales at Prudential Douglas Elliman, which handles properties on Kenmare. “It’s the new hot spot. Half a dozen deals I think you’ll hear about — residential and commercial.”
One Kenmare Square and developer Andre Balazs
In terms of retail, Kenmare is also home to JF & Son, a women’s clothing store, which opened in late 2009, as well as children’s boutiques Paul Frank and Sweet William, which opened in October. That’s in addition to La Esquina Taqueria, the diner/taco stand that can be seen in the credits of “Saturday Night Live,” as well as the Village Tart, brick-oven pizza place L’asso, and Go East juice bar, among others.
And, on Kenmare and Cleveland, a pop-up restaurant called What Happens When was set to open by press time. A news release described it as a nine-month temporary restaurant installation in which every 30 days the theme will change, with a new design, staff uniforms, cuisine, soundscape and lighting. A source, who asked not to be named, said that a 30,000- to 40,000-square-foot, high-end hotel is planned for the space when the pop-up leaves.
“It would be similar to the Soho House in the Meatpacking District,” the source said. “It would be an exclusive, elite, members-only club.”
At the corner of Kenmare and Elizabeth streets, the 55-room Nolitan Hotel is set to open this month with rates starting at $289 a night, according to its website. Guests will also get passes to Equinox gym, and rooms will have minibars with gluten-free and vegan snacks. In-room video game systems like Wii, PlayStation 3, and Xbox 360 are also available.
Meanwhile, on the residential front, some landlords (primarily those that are not bound by rent control) are refurbishing the decades-old housing stock.
Zahabian said he gets calls every day from people interested in buying his building. “I don’t pay them any attention,” he said, adding that he knows his building, which he bought in 2007, is a good investment. He believes the owners of the 15 or so other apartment buildings on the strip feel the same way about not selling now because the market is starting to look up and the strip is being revitalized.
By doing basic refurbishing on his apartments at 19 Kenmare, Zahabian is able to raise rents 100 percent, he said. A refurbished two-bedroom unit in his building goes for between $2,000 and $2,500, he said.
However, he has only refurbished about 20 percent of his building because the rest of it is rent controlled, he said.
The market is “getting stronger,” said Famularo.
“I am seeing a lot more activity than there had been,” he said. “In ’06 and ’07 we were flooded with calls. Then it was dead for two years. In 2010 it started picking up, and 2011 is continuing to get stronger.”