A struggle is under way for the identity of Astor Place — once a no-man’s land between an untamed East Village and the edge of New York University’s unofficial turf, and now the epicenter of high-powered redevelopment in an area associated with the birth of punk rock.
Score two points for gentrification, with a recent deal by Walgreens and an impending deal by David Barton Gym to move into the heart of the area, right next to the Astor Place Cube sculpture, across from the No. 6 line subway stop entrance.
As first reported by The Real Deal on its daily Web site, Walgreens is set to the take space formerly occupied by Astor Wines & Spirits at 12 Astor Place, while David Barton or another health club is poised to install Stairmasters where books once reigned in the Barnes & Noble at 4 Astor Place.
Meanwhile, coffee behemoth Starbucks, perhaps the ultimate symbol of gentrification, recently renewed its lease on a 3,200-square-foot space at 51 Astor Place, according to a company spokeswoman. The chain has three stores directly bordering the square, though one will be in the bookstore that’s shuttering its doors, and another sits two blocks east on Second Avenue and 9th Street.
Between these deals and the Chase bank branch at the base of the Related Companies’ new 21-story glass residential tower at 445 Lafayette Street, East Village grit is giving way to Midtown-style blandness.
The changing retail picture reflects huge rent increases, as well as the increasing propensity of customers to buy books and music online, which has hurt Barnes & Noble and another former Astor-area retail powerhouse, Tower Records.
Banks and drugstores, though seemingly ubiquitous and dull, draw paying customers. Barnes & Noble, by contrast, was popular with students who browsed for books and magazines, but didn’t consistently contribute to revenue by shelling out at the cash register.
Barnes & Noble officials said they were shuttering the store because the rent was too high.
“From an economic standpoint, Barnes & Noble has another location [nearby] on Union Square, and I guess they weren’t able to generate as much revenue as they had hoped,” said Jeff Gural, a managing partner for the building’s owner, Lafayette-Astor Associates Inc.
Modest sales might have sufficed 13 years ago, when Barnes & Noble bought the lease after former tenant Conran Stores filed for bankruptcy protection. But to pay the going rent of $125 per square foot, Barnes & Noble would have needed a big increase in sales.
“These deals signify the end of an era down there,” said Ben Fox, president of Winick Realty Group. “It’s a classic example of a tenant that, because of its use, can only pay so much in rent.”
At issue now is which tenants will take over several other large vacancies in the area. So much prominent square footage is available that a couple of large tenants could skew Astor back toward East Village hipness — or confirm its blandness. Sites include the former Tower Records space at 692 Broadway, two pieces totaling about 35,000 square feet, and the former Wiz space at 726 Broadway, with roughly 23,000 square feet.
Setting up shop around Astor Place requires understanding a unique submarket of the Village. Because of NYU and Cooper Union, Astor is populated by students who like to hang out at the Astor Place Cube. But it is also close to wealthy residents of lower Fifth Avenue, and the area has lured some well-heeled buyers to the luxury co-ops at Related’s Astor Place glass tower. The combination makes for an unusual mix.
“If you stand at the corner of Astor and Broadway [and] if you’re a retailer from out of town, it’s not that easy to understand what is going on here, what times of day people are out, who is the customer, who lives here,” said Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail.
Astor Place as a happening retail hub is also under pressure thanks to the gourmet- and fashion-driven gentrification of Union Square’s retail space over the last several years. Shoppers are flocking to the massive Whole Foods Market and Trader Joe’s there, with young adults mobbing stores like Forever 21, Designer Shoe Warehouse and Virgin Megastore. Meanwhile, Astor’s other retail competition, Soho, has extended farther south along Broadway than it used to, and it has a vibrant mix of stores including the downtown Bloomingdale’s.
“Years ago when people got off the train to walk to Soho, they would get off at Astor and start walking south,” said Robin Abrams, executive vice president at the Lansco Corp. “Then they started getting off at Houston and walking south, and now they get off at Spring Street.”
The trick now, said Abrams, is reintegrating Astor into these two strong shopping districts. She sees opportunities for discount fashion retailers.
As the neighborhood evolves, brokers say a gym and a drugstore aren’t likely to lure shoppers off the train at Astor — but they won’t scare them away, either.
In the deal for the Barnes & Noble space, Barton has a lease for the 32,000-square-foot space in hand, Gural said last month. He said a deal for the location, which two other health clubs have also expressed interest in, was set to close by the end of May. Barnes & Noble is leaving the site at the end of January 2008.
Gural declined to comment on asking rent, but said the new tenant will pay roughly 50 percent more than Barnes & Noble, which was reportedly paying $1.15 million a year.
Walgreens’ new space — which includes 5,700 square feet on the ground floor, a 9,800-square-foot basement and an 8,200-square-foot sub-basement — is renting for about $1 million a year, according to sources. Astor Wines has since relocated to 399 Lafayette Street.
These changes, neither hip nor outright bland, may leave Astor Place without a strong retail profile, but at least the zone will remain busy.
“From a real estate perspective [they are] good-credit, stable tenants and they may not help a neighborhood, but they don’t hurt it,” said Roseman. “If you put in a lot of local tenants and they go out of business, a row of empty stores turns the neighborhood the other way.”