It wouldn’t have been difficult to imagine a couple of years ago, when bookstores and record chains were closing en masse, that online shopping could seriously cripple the New York City retail world. It’s so easy to buy things online these days, that a lot of New Yorkers don’t bother trekking to the grocery store or even the corner bodega for necessities like toilet paper or toothpaste. They just order online from Amazon Prime and wait for it to be shipped to their doorstep, free of charge.
It sometimes seems there are only a few things you have to do in person these days — like, say, a colonoscopy. Or a haircut.
So it’s surprising, in some ways, that good old-fashioned brick-and-mortar New York City retail is as hot as it has ever been, which we examine in a series of stories.
We take a look at the biggest retail leases of 2013, the top brokerage firms doing deals, the biggest investors, and the largest projects.
Surveying the 20 biggest deals in Manhattan for the year, two-thirds were gyms and organic supermarkets (like Whole Foods) — which makes sense, given that it’s hard (if not impossible) to browse fresh produce and work out online.
(These leases also show how much healthier many of us must be living these days —Nanny Bloomberg would have been proud, and maybe Mayor Bill will be too, as he takes office this month.)
Whatever the type of store, retail space is a major draw for investors today, and maybe the major draw in commercial real estate.
Retail has become such a driving force in the purchase of the city’s largest office buildings that the office space is almost an afterthought for some. When investors purchased the 27-story office building at 650 Madison Avenue for $1.3 billion several months ago in one of the biggest buys of the year, they said they purchased it because they believed the retail on the ground floor alone was worth $1 billion, never mind the rest of the building.
Indeed, median rents on upper Fifth Avenue passed $3,000 per square foot in 2013, a new benchmark (making it the second priciest thoroughfare in the world), with Times Square looking to follow suit soon.
Of course the good times aren’t confined to retail.
This month, we also looked at the top office leases of 2013, in “The office building comeback,” and examined the top residential deals, in “A drop at the top.” (Surprisingly, the prices paid at the top of the luxury residential market didn’t match the hype surrounding that sector, though that was largely due to new development sales that haven’t closed yet.)
The million- (or, actually, billion-) dollar question is whether this market has legs. Given that there hasn’t been a massive expansion of lending, some say we’re in the opening innings of an up market. Others say there’s already a bubble. For predictions about where the market’s headed in the New Year, see “Lowering expectations in 2014.”
Elsewhere in the issue, we looked at Steve Witkoff, one of the most active developers in New York today (“Witkoff: the savvy strategist”), and examined former L.A. Dodgers owner and Boston real estate mogul Frank McCourt, who only has a toehold in New York now, but is looking to build his portfolio here (“Frank McCourt’s new ballgame”).
Finally, I’d like to congratulate several members of The Real Deal team for their recent promotions. Hiten Samtani has been elevated to reporter, Kathy Clarke to senior reporter, Guelda Voien to associate web editor, and senior reporter Adam Pincus has earned the additional title of research manager for his tireless data digging. I’d also like to welcome Eileen AJ Connelly, formerly of the Associated Press, as TRD’s new deputy managing editor, and Lisa Keys, who was previously at the New York Post, as the new managing editor of Luxury Listings NYC.
And on a sad note, I’d like to remember one of our salespeople, Leora Brinkley, who passed away this past month at her South Florida home. Leora had a great attitude and was incredibly warm and hardworking. She brought a great deal of sunshine to our operations in the Sunshine state. She will be sorely missed.
Enjoy the issue.