Since opening her eponymous millinery shop in Nolita 10 years ago, Lisa Shaub has witnessed the euphoria of a trendy district on the rise. But now she’s watching the fall.
Shaub says she has never seen business conditions as rough — or vacancy rates as high — in Nolita as they are now.
Three storefronts just south of her shop at 232 Mulberry Street are available. In all, this stretch of Mulberry between Prince and Spring streets has five stores that are closed or on the market. A similar pattern is unfolding throughout this nine-block district, which lies south of East Houston Street and north of Broome Street, between the Bowery and Lafayette Street.
“Every single day I come to work, one or two businesses that have been here five years or more are gone,” said Shaub, only slightly exaggerating the proliferation of vacancies. “I’ve been in business 20 years, been in this location 10 years, and I’ve seen bubbles burst. But that takes my breath away.”
Anyone who can read the words “50 percent off” knows that most retailers have suffered stunning sales and profit drops since the stock market took a cliff-dive last September. But the retail scene in Nolita — the name brokers coined in the late 1990s to add to the cachet of the once-gritty area north of Little Italy — appears to be one of the hardest-hit in Manhattan.
For some properties, retail rents have fallen to $100 a square foot — the same level seen a decade ago as the neighborhood first took off as a destination for trendy restaurants and boutiques, and a 25 percent decline from a year ago. Brokers say overall Nolita rents now range between $100 and $150 per square foot, down from $200 a square foot or more in the boom times.
The desperation discount sales of the last few months have given way to a wave of closures. In a survey by The Real Deal early last month, more than 40 spaces were closed or available. By contrast, when the Web site Gawker posted its “recession retail map” of Nolita in February, it listed just 13 available spaces. Four years ago, New York magazine listed about two dozen.
Many of these vacant stores, including MK Lifestyle at 236 Mulberry and Lugo Tailored Menswear at 246 Mott Street, have been sitting empty for months.
The retail closures occurred like falling dominoes. Gone is Nancy Koltes at Home at 29 Spring Street. Gone is Ghenet, a well-regarded Ethiopian restaurant at 284 Mulberry. Gone is chic maternity wear store Cadeau at 254 Elizabeth Street. And gone is hip-hop inspired street-wear brand Triple Five Soul at 290 Lafayette Street.
Still others that have not yet packed up told The Real Deal of plans to close at the beginning of this month. These include women’s clothing stores Variazioni at 214 Mulberry Street, which was hosting a closeout sale early last month. (Variazioni also operates another store in the neighborhood.) And Think Closet, which has three locations, is closing its shop at 230 Mulberry. A sales associate said the company will focus on the remaining two stores at 9th Street and 242 Mulberry.
Nolita has typically attracted entrepreneurs, thanks to small storefronts with the lure of a Downtown address at a cheaper-than-Soho rent. This spring, Nolita rents have plummeted to as little as $90 per square foot, according to James Famularo, a senior executive managing director at Coldwell Banker Commercial Properties. That is down from about $135 a square foot a year ago, he said.
Some newcomers
While “for rent” signs vastly outnumber announcements of new arrivals, a handful of newcomers are set to open in Nolita, taking advantage of those new rent breaks.
Mexican firm Grupo MYT is set to open La Crepe Parisienne at 51 Mulberry Street, and a trio of partners from France signed a lease to open a French sandwich shop called Tartinery at 209 Mulberry Street next month.
Stephan Jauslin, co-owner of Tartinery, said the partners chose Nolita after scouring the city from Harlem to Lower Manhattan. They were encouraged by the consistent crowds at the French-Moroccan bistro Café Gitane at 242 Mott Street and Cuban-Mexican Café Habana at 17 Prince Street, as well as the new development along Kenmare Street.
While acknowledging concerns about the economy, Jauslin is banking on his concept’s European flair and relatively recession-friendly prices (dinner there will cost about $26). Tartinery replaces clothing designer Tracey Feith’s boutique, which had occupied the space for a decade and closed in fall 2008.
“A lot of clothing stores are closing down, which is kind of unfortunate,” said Jauslin. “[But] I think our concept is going to hold pretty well, even though the economy is not good.”
Meanwhile, Famularo said he expects the ailing area to regain some magnetism and continue skewing south toward Kenmare Street, when two high-profile restaurants square off.
TC4 veteran Manuel Trevino will be running Travertine at 19 Kenmare, while the owners of the Upper East Side Italian restaurant Sfoglia are opening Civetta Ristorante at 98 Kenmare. Both were slated to open before June 1.
“Once they open … there will be a traffic influx,” said Famularo, who sold the building to Sfoglia’s owners.
Braving it out
Howard Kim, who is taking over the space at 219 Mott Street formerly occupied by women’s apparel boutique Alice + Olivia, also believes he can buck the recession. He and his wife own a wholesale shoe brand, Kathryn Amberleigh, named for her.
“Rents are coming down, and we felt like this was a good time [to get in], even in a down economy,” said Kim.
Long-term retailers, meanwhile, aren’t giving up without a fight.
Shaub and more than 60 retailers in Nolita and Soho have formed Shop Small Stores, or S3. The shop owners trade tips on how to approach landlords about rent reductions and jointly hosted a raffle for shoppers last month. “Business is like an organic thing, and I’m trying to relate to clients and talk to people,” said Shaub. “You can’t get lazy.”