When appliance giant P.C. Richard & Son signed a $1.5-million-a-year lease on 40,000 square feet of retail space on West 23rd Street last month, it joined the ranks of such mass retailers as Home Depot, which will open a 100,000-square-foot store across the street this summer, and Burlington Coat Factory and Best Buy, which are already located nearby.
Clearly, retailers have taken a liking to the area on the cusp of Chelsea and the Flatiron district, but analysts say it s not because of the neighborhood s distinctive character. Rather, space is available and convenient to mass transit.
“Very few people go to 23rd Street out of choice,” said Steven B. Greenberg, president of the Greenberg Group, a retail real estate advisory firm in Hewlett, N.Y.
Greenberg said big boxes go wherever in Manhattan there is space because these stores, unlike high-end boutiques, do not need to locate where their target customers live and work. “They are destinations,” he said.
“If you build it, they will come,” agreed Faith Consolo, vice chairman of Garrick-Aug Worldwide, a retail leasing service in Manhattan. “It s an opportunity. People will come from all over the city.”
That s why Target is also eyeing space on West 23rd Street, Consolo said. Calls to Target were not returned by press time. But James Buslik, a principal with Adams & Co Real Estate, which brokered the P.C. Richards deal, said that the quality of the neighborhood does matter somewhat, pointing out that northern Chelsea is now a booming residential area.
Indeed, more than 2,000 rental units have been added to the area between 23rd and 34th Streets since the mid-1990s. “It s becoming a 24-hour neighborhood,” Buslik said. But that s more of a plus than it is a driving factor for retailers, he acknowledged, noting that he expects to see big boxes pick up space on any major thoroughfare that offers the requisite space and access to mass transit – residential boom or not. He pointed to 14th, 34th and 42nd Streets as ideal targets.
Wherever they find space, everyone agrees that when it comes to Manhattan, more and more big boxes want in, even though space is scarce – and expensive.
“In New York City, one store can do more in sales than six suburban stores,” Consolo said. She pointed to Bed, Bath & Beyond on Sixth Avenue and 18th Street, which was one of the first such retailers to enter the area. It took off immediately, and now the strip of Sixth between 18th and 23rd streets is home to such retailers as T.J. Maxx and Old Navy. “The traffic is incredible,” she said.
That s why retailers are willing to pay $50 to $100 a square foot in Manhattan as opposed to $20 to $25 a square foot in the suburbs, Greenberg said.
Any fear that Manhattanites would reject big box stores in favor of small neighborhood stores has not proved justified, they say.
“These stores do incredible numbers,” Consolo said. “The residents have spoken: Bigger is better.”