The Chamber of Commerce of Greenwich, Connecticut, works hard to polish the city’s small-town seductiveness: Landscaping is cared for, and building facades look old-fashioned. Instead of stoplights, traffic along Greenwich Avenue is directed by police wearing white gloves.
Yet for those seeking to open shop along Greenwich Avenue, there’s nothing quaint about rental costs.
“Certain retailers will pay almost anything to be on ‘The Avenue,'” said Ron Brien, vice president of Allied Property Group in Greenwich, a commercial brokerage. “There’s always an interest behind a rental sign.”
While the futures of some real estate markets were thrown into question by this summer’s credit crunch, the retail performance of one of the New York’s poshest suburban enclaves, home to countless CEOs and Wall Street executives, looks to be holding its own.
“The market remains very strong, with national and international retailers and banks vying for prime spaces,” said Scott Lifschultz, a broker with GVA Williams in Stamford.
Average asking rents on Greenwich Avenue have nearly tripled in five years, from about $60 per square foot in 2002 to about $150 (and sometimes up to $200) this year. The vacancy rate on the strip has dropped markedly, from about 9 percent five years ago to below 5 percent today.
The turnover of stores is low — usually only about a dozen stores per year, according to local brokers.
The avenue, which runs one way downhill from Putnam Avenue to the train station, features a virtual United Nations of global luxury chains.
Greenwich Avenue has 13 jewelry stores, about double what it had several years ago. In addition, swimwear store Malia Mills, Spanish clothing retailer Zara (which renovated and occupies a three-story building adjacent to Saks Fifth Avenue), children’s clothier Jacadi and cosmetics retailer Sephora have all recently opened shop.
Claire’s Accessories, a trendy chain that appeals to teens, will come to Greenwich Avenue soon. A Commerce Bank is under construction, and Mitchell Gold and Bob Williams shop is also on the way.
Following the avenue’s rise, adjacent streets have also seen steep increases in rental prices. Some 50 shops are located within several blocks of Greenwich Avenue, and rental prices there have gone up about 40 percent in the past two years, to about $60 per square foot.
With space so much in demand, owners can be choosy about who rents their space. Brokers say that applicants for prime spots on Greenwich Avenue need to be able to pass credit checks demonstrating that their stores can earn between $500 and $2,000 in revenue per square foot per year.
These mathematics have pushed out a lot of the mom-and-pop stores that once had presences along the avenue. Chancy D’Elia, a locally owned boutique that sold high-end women’s clothing, shut down earlier this year when its five-year lease ended and the rent doubled to about $125 per square foot. The space is now occupied by Lucky Brand Jeans.
On the other hand, ownership along the avenue is diverse, and many buildings have been owned by the same families for generations. For these families, the money earned by leasing to large chains represents a steady — and generous — revenue stream.
While Greenwich has long been a sanctuary for banking executives, in the last few years it has become even wealthier, thanks to the arrival of numerous hedge funds that have chosen to base their firms there. Greenwich’s residents now include five billionaires on Forbes’ list of the world’s 400 wealthiest people. Each one directs a hedge fund.
“No other city in America has as many residents who’ve made so much money in so short a time,” said Brien of Allied Property Group. “Wealthy people live and work and shop all in this one small town.”
Yet despite the drumbeat of demand, the wealthy residents and the high rental prices, Greenwich Avenue isn’t the costliest suburban retail high street in the country, according to research by Colliers International. (That distinction belongs to Rodeo Drive in Beverly Hills, where rents average about $480 per square foot.) Indeed, Greenwich Avenue isn’t even the priciest retail street in the state. Brokers say that retail space along Main Street in nearby Westport — Martha Stewart’s town — commands nearly identical, if not slightly higher, asking rents.