Nearly a dozen retail vacancies dot Broadway between Houston Street and Astor Place. In recent years of economic excess, the strip languished in the shopping shadow of its neighbors — trendy Soho to the south and bustling Union Square to the north.
But in today’s sagging economy, Noho, with its rents half the price of areas like Soho, could draw new retail blood such as apparel tenants, gourmet markets, and European brands that would have previously turned their noses up at the area, brokers said.
Still, the economy and bleak national retail picture are stalling the neighborhood’s resurgence.
Due to market conditions, “so many retailers have pulled back,” said Jeffrey Roseman, a principal and executive vice president at Newmark Knight Frank Retail.
Andrew Mandell, a partner with Ripco Real Estate, agreed. “The problem now is that chain stores are dormant, Wall Street is struggling, and [retailers] are preserving capital and paying down debt,” he said.
The spaces that longtime tenants Au Bon Pain and Gonzalez y Gonzales occupy are on the market because the two eateries have leases coming due.
The stretch of Broadway includes a disparate mix of fast-fashion retailers, food tenants, sportswear stores and chain retailers like Crate & Barrel and Urban Outfitters. But lately it’s been somewhat of a ghost town.
The strip fell victim to national chains that went out of business, such as Tower Records (692 Broadway) and Steve & Barry’s — which was set to replace the record store there until it, too, went belly up — and failed retail concepts, such as Helio, a wireless merchant (626 Broadway).
“This area has been struggling,” Mandell continued. “Even at the height of the market, there have been a lot of vacancies there for a long time.”
During its heyday in the 1980s and 1990s, the avenue was the shopping destination of the New York University crowd, marked by iconic stores like Antique Boutique and Canal Jeans.
But that’s before some neighboring areas bloomed into the vibrant shopping destinations they are today.
Nonetheless, Noho still benefits from a mix of student, residential and tourist traffic. And when the NYU bookstore moves from University Place to 726 Broadway next year, the strip will get an added boost, brokers said.
Peter Farkas, the in-house owner’s representative for 718 Broadway, the former home of Canal Jeans, is bullish on the area.
“I think Soho and Noho are starting to blend,” he said.
The location at 718 Broadway is close to being signed by a European apparel wholesale company that is looking to launch a lab store in the Diesel model, Farkas said.
A European brand could also take over 738 Broadway, said Lori Shabtai, director of luxury and brand retail for Winick Realty Group, which is brokering that lease.
The door is also opening for smaller, mom-and-pop stores, she noted. Indeed, landlords in the area are waking up to gourmet stores, delis, coffee shops and “Shake Shack” types of merchants — all potential tenants, she said.
Before, “Everybody wanted a tenant that was a bank, everybody wanted a tenant that had 500 stores,” Shabtai said. “Then you see that retailer closing 400 of their 500 stores.”
As a result, “A lot of entrepreneurial tenants that were not able to move forward in the market … suddenly, they’re a hot commodity.”
When the former Tower Records spot that has been vacant for two years gets filled, it will send a signal to retailers that the area is undergoing a rebirth. That’s because the store served as the unofficial retail anchor for the neighborhood, brokers said.
Vornado, which is marketing the location, declined to comment.
However, TJ Maxx, CVS and Forever 21 have eyed the spot, sources said.
Newmark is brokering the lease for 632 Broadway, the former home of the now-defunct National Wholesale Liquidators. The asking rent for the space is between $200 and $300 a square foot.
The spot could go to a major shoe company, a well-known designer sportswear store or a video merchant that would complement the Best Buy next door, Roseman said.
Ripco has been marketing the Au Bon Pain at 685 Broadway, whose lease expires in October, for a year. The store is the retail base of a co-op building with $3 million loft apartments, so the landlord wants to replace the Au Bon Pain with a non-food retailer, such as an apparel merchant, shoe store or a wireless phone shop. But in this market, if the landlord can’t find a better tenant, he is likely to extend Au Bon Pain’s lease.
While the asking rent is $225 a square foot, “if someone comes along and says they want to pay $150, we’ll definitely entertain it,” said Richard Skulnik, the broker who is handling the location.
Ripco is also hoping lower rents will woo a tenant that would have been set on Soho for the Gonzalez y Gonzalez restaurant space at 625 Broadway.
The asking rent is $250 a square foot, whereas Soho rents are around $500 a square foot, said Scott Auster, a partner with Ripco.
Ripco plans on replacing the restaurant, which it has been marketing for over a year, with two tenants: an apparel merchant for the Broadway side and a café for the Mercer Street side, Auster said.
“We’re hoping for something to move in this fall,” he said.