Brokers believe Downtown could become the next retail hot spot, and hope Wall Street bonus money will drive sales and spread the wealth.
The desired lift could come from a pair of proposed automobile dealerships that could augment a commercial market largely known for a few stalwarts, such as the Century 21 department store and J & R Music World.
Lincoln and Range Rover dealerships are eyeing showrooms in the area, according to Joseph Aquino, a managing director of Garrick-Aug Worldwide Ltd.
“It appears to be a real sleeper, but it’s a powerful market and could be an alternative to Tenth and Eleventh Avenues,” he said. “Once one of them makes a commitment, there could be a flurry of activity because the whole market is untapped.”
Aquino is not alone in this hunch. In its summer retail market report, Colliers ABR made the same prediction. It said that car showrooms will locate there “looking for Wall Street ‘players’ to spend their bonuses as soon as they walk out of their offices.”
It’s plausible, agreed Steve Soutendijk, an associate with CB Richard Ellis’s Tri-State Retail Services Team. But Soutendijk said automobile dealers wanting to move Downtown haven’t been “knocking on our doors.”
Still, Downtown has the right combination of relatively low prices and high traffic, at least during the week, so it could happen, he said. “For Manhattan retail, it’s the lowest rent south of 125th Street,” he said.
Downtown rents seem to be staying low. The average retail rent this summer was $59 per square foot, an increase of only $1 a square foot from last summer, according to the Colliers report. That compares to average retail rents of $125 a square foot in Midtown, up from $112 last summer.
Those prices mean that automobile dealers could afford to rent larger spaces than the 5,000- to 10,000-square-foot mini-showrooms that exist on Park Avenue.
“It just makes sense,” Aquino said. Automobile dealers “couldn’t afford to be on the Sixth Avenue, but here they have the same market. On the one side are big earners, and on the other side are administrative employees.”
That’s buttressed by the thriving fortunes of the financial services industry, which anchors the district. According to the Colliers report, bonuses have jumped 50 percent from 2002. That’s critical, because auto dealers are seeking “impulse buyers,” Aquino said. He also said it’s no accident Mercedes-Benz and Ferrari have the showrooms on Park Avenue.
With 280,000 workers Downtown making an average of $140,000 a year, the chances for impulse buys are many, brokers said. As Downtown’s residential base grows, retail should get a boost, Aquino said. “You want to get cars closer to people,” he said.
One limiting factor, however, may be a lack of spaces that lend themselves to auto showrooms, Soutendijk said. “It’s a question of the buildings Downtown,” he said. “They aren’t suited physically to retail.”