Spa Belles is looking to expand in Chelsea, Soho, Tribeca and the Upper East SideIt seems New Yorkers still want their mani-pedis. Although nail salons have felt the pinch of the downturn, they have continued to grab retail space, and landlords have helped by offering them concessions, at both new and existing locations, brokers say.
Like discount stores, nail salons have proven nimble enough to survive, and some have even picked up the pace of expansion, given the bargain rents. “[Nail salons] provide a service that is an affordable luxury that a woman can afford even in today’s economy,” said Robin Abrams, executive vice president of Lansco Corp. “It’s an inexpensive way to make them feel good.”
Still, the concessions have often been short-term rent reductions, meaning a painful rent increase could be looming for these salons.
“Most [landlords] are not talking about a long-term or permanent reduction. They will consider a short-term rent reduction to help the tenants with what’s been a challenging time, with the rent reverting back to its original [number] in six months to a year,” Abrams said. “Many of these leases were signed at the height of the market.”
If a nail salon was paying $200 for a spa uptown on Madison Avenue, “maybe the landlord would knock 20 to 30 percent off,” Abrams said.
These savings are helping some keep plans to grow. The salon Spa Belles, for example, is looking to expand in Chelsea, Soho, Tribeca and the Upper East Side, said Craig Slosberg, senior managing director of Newmark Knight Frank. Slosberg described it as one of the higher-end salons, spending between $600,000 and $1 million on a build-out, and celebrities such as Miley Cyrus have been known to pop in for a manicure.
The salon also just renewed its lease at 74 Seventh Avenue and 23rd Street, a “retail strip that is an expensive place to be,” he said. The asking rent is about $200 a square foot now, which is still 20 percent off pre-recession rates, he added.
In another case, Envy salon is taking advantage of recession-friendly rents to spread its wings in its core markets: “high-traffic, ethnic, urban retail locations” such as 181st Street in Manhattan, Fulton Street in Brooklyn, Fordham Road in the Bronx and Jamaica Avenue in Queens, said Barry Fields of City Connections Realty, the retailer’s broker.
Envy has sidestepped high rents by moving into second-floor spaces, Fields said. This spring, the salon will open a store at 423 Knickerbocker Avenue in Brooklyn, for an asking rent of $30 a square foot, and another at 1274 Fulton Street, with an asking rent of about $17 a square foot.
Envy will also move into a ground-floor space in coming months at 940 Southern Boulevard in the Bronx, with an asking rent of $47 a square foot.
This leasing activity is due in part to landlords facing market realities.
“Many thought they would get an ATM or a chain store, [but] now a local nail salon is one of the better tenants out there. They’re clean, they tend to do a nice build-out, and they’re successful, so they tend to pay their rent,” said Andrew Mandell, a broker with Ripco Real Estate.
Still, salon owners have had to adjust to today’s more frugal shopper. Several salons are stepping up promotions, slashing prices of manicures and pedicures, Abrams said.
And even the tonier salons have seen the recession eat into sales, Slosberg said. “Some of the higher-end guys are finding that people aren’t going in for the full facial and spa treatment for $300,” he said. “Also, people might wait an extra day to touch up their nails.”
But while the nail salon business “as a whole has suffered some setbacks like everybody else, [in this] market — real estate- and dollar-wise — it’s more feasible to make deals,” Fields said.