Landlords at the bottom of the crossroads of the world are seeing persistence pay off.
Retail rents at the south end of Times Square, on 42nd Street between Eights and Sixth avenues, saw the largest average increase in the entire city in March, hitting $290 a square foot, a nearly 86 percent jump from last year. That gain was far ahead of average ground-floor retail rents along Manhattan’s major retail corridors, which climbed a more modest, but still impressive, 19 percent last year, hitting an average of $329 a square foot, according to the Real Estate Board of New York.
A boom in luxury residential building in the area — with buyers paying as much as $1,000 a square foot — is pulling business in its wake.
“That is driving the commercial prices,” said Neal Sroka, senior vice president of Corcoran Group Marketing.
The New York Times’ new headquarters building on Eighth Avenue between 40th and 41st streets is also giving a lift to an area that’s seen its share of ups and downs.
“It’s become one of the most important thoroughfares in the country,” said Faith Hope Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman in Manhattan. “The demand is so high now that it’s driven the rents off the charts.”
Well known, high-end stores, luxury residential and office buildings, mobs of tourists, a dramatic drop in crime, and a revamped Bryant Park have turned the onetime locus of urban decay into a trendy dining and shopping Mecca.
Modern-day Times Square is home to Junior’s Restaurant, Dallas BBQ, Brooklyn Diner, Godiva, H agen-Dazs, Dave & Buster’s, Econo Lodge, Aerosoles, Ecko Unlimited, and Ann Taylor Loft — some already there and others on the way.
“Retail space is tight everywhere in Manhattan so that creates an opportunity for an up and coming area like Times Square,” said Ellen Goldstein, vice president of policy, planning and design at the Times Square Alliance, the business improvement district.
Major retailers and restaurateurs — including a white tablecloth restaurant — are even moving to the Port Authority of New York and New Jersey, adding to the bus terminal’s 38 existing retail, food, and beverage tenants.
Other Port Authority tenants are sprucing up their existing spaces. While the terminal’s food and retail tenants used to rely solely on commuters, “more and more we’re diversifying our constituent base,” to include residents and office workers, said Frank DiMola, director of real estate for the Port Authority.
Over the last decade, 5,500 new residential units were added to the Times Square residential stock. “You have a very different consumer population moving into the area,” said Ellen Goldstein, vice president of policy, planning, and design for the Times Square Alliance, a business improvement district.
Office towers are bringing 160,000 white-collar workers into the neighborhood each day, and the Times building will bring more, Goldstein said.
“We want our new building to be a dynamic presence that enhances the beauty of New York City for residents and visitors alike,” Catherine Mathis, the vice president of corporate communications for The New York Times Company, said via e-mail. Retailers hope to meet the demands of the new demographic.
And then there are the tourists, who are coming to Times Square in droves. “The retailers see that and they want to be a part of it,” said Cory Zelnik, president of Winick Realty Group, which specializes in commercial real estate. According to the Times Square Information Center, the number of tourists in the area climbed to 1.8 million in 2005; in 1999, it was around 1 million. The information center only tracks the number of visitors to the center.
The owners of Junior’s Restaurant, the famous cheesecake business, say 42nd Street may actually be too busy. They hope to capitalize on the traffic of 42nd Street without being overrun by it, and recently moved from their site there. Junior’s third-generation owner Alan Rosen, his brother and their father are opening an indoor restaurant, outdoor cafeacute;, retail bakery and take-out department on 45th Street and Shubert Alley in mid-June.
“I think it’s the right space for us,” Rosen said. “I think it’s going to work.” The main thoroughfare “just didn’t feel right,” Rosen said. “There are so many people on the street it may be intimidating to locals.” But at the 45th Street location, which is on the backside of 1515 Broadway, “you can actually walk on the sidewalk,” Rosen said.
Times Square is not the crime-infested area it once was. Indeed, major crime dropped to 1,011 incidents in 2005 from 1,753 in 2000, according to the Times Square Alliance.
The revamping of Bryant Park, which spans 40th to 42nd streets from Fifth to Sixth avenues, contributed to the transformation of West 42nd Street. Upon completion of the makeover in 1992, “rents started going through the ceiling,” said Dan Biederman, the founder and executive director of Bryant Park Restoration Corporation, a BID. “Then the whole street took off.”