Sure, the Meatpacking District may be a hot spot at night and on weekends, but foot traffic is sparse during the weekdays.
And the neighborhood could use a more diverse group of tenants besides just fashion, according to brokers.
But that hasn’t caused the Meatpacking District retail juggernaut to lose steam yet. Ten years ago, retail rents in the Meatpacking District ran $25 a square foot.
Today, thanks in part to the success of businesses such as the Hotel Gansevoort, the retailer Jeffrey New York, and restaurants Pastis and Florent, rents are running $200 a square foot.
That compares to an average asking rent for all retail space south of 14th Street (including both avenues and lesser-traveled side streets) of $90 a foot, according to the most recent report from the Real Estate Board of New York.
The Meatpacking District runs from West 14th Street to Gansevoort Street and from Hudson Street to the West Side Highway, but because of the flurry of activity, its periphery appears to be expanding.
“The boundaries are moving a little in every direction,” said broker Robin Abrams, executive vice president for the Lansco Corporation and chair of the REBNY retail committee.
“Probably what’s happening is the Meatpacking District is getting linked to the West Village” by way of Hudson Street, she said.
A large step in the evolution of the neighborhood is set to take place at the major crossroads of Ninth Avenue and 14th Street, where the building currently occupied by the Western Beef supermarket and Markt restaurant is set to get a new 60,000-square-foot tenant for the entire three-story building. Abrams said that the tenant that takes that space “will have a big impact on the area.”
Broker Robert K. Futterman hopes to lease the building, which will include a penthouse yet to be built, to a single tenant for an annual rent of $5 to $6 million.
“It’ll be fashion or it’ll be retail,” said Futterman. “It’ll be something really exciting based on the interest we have.”
In the near future, said Faith Hope Consolo, chair of the retail leasing and sales division at Prudential Douglas Elliman, consumers can expect to see beauty stores sprouting up in the area as well as local retailers from other parts of the city looking to attract tourists “that won’t otherwise come to their store.”
As of mid-August, businesses set to open their doors in the landmark district include: Canyon Ranch health spa, an Andre Balazs hotel and club, Esthete by Atrium buyer Christine Lee, Diane von Furstenburg, Maria Cornejo (a second boutique for label Zero), Theory, Intermix and Trina Turk.
Retailer Barney’s New York has also considered opening a store in the district. But Consolo cautioned that in the long run, the area’s growth could eventually be stunted unless a more diverse group of tenants sign leases.
“It’s got to be a more well-rounded retail environment that’ll bring more traffic,” Consolo said.
What the district needs, Consolo added, is a real sense of “neighborhood.” She said foot traffic is sparse during the weekdays, “very much like old Soho.” And winters are quite “bleak” in the area.
The district will likely move closer to a full-fledged neighborhood as a result of residential development along the High Line, the unused elevated railway that is being transformed into a public park. One such new building set to front on the High Line is the Caledonia, a luxury residential tower at 450 West 17th Street between Ninth and 10th avenues being developed by the Related Companies.
While retailers might open up on tony stretches of Madison and Fifth Avenues for branding alone and be willing to operate their stores at a loss, that is not happening in the Meatpacking District, Futterman said. “I think anyone that opens there is doing it to make money,” he said.
Patrick Breslin, president of global retail at GVA Williams, said the average national sales per-square-foot is around $400 or $500.
To make a profit in the Meatpacking District, he added, retailers have to bring in around $1,000 per square foot.
That appears to be happening.
“Everybody is saying that their sales are going very well down there,” Breslin said.
Rents vary depending on how much foot traffic a location gets.
At the Western Beef building, Futterman expects rents going for as much as $300 a square foot on the ground floor.
Breslin is marketing a property at 85 10th Avenue between 15th and 16th streets, home to restaurants Craftsteak and Del Posto. Asking rent for the “pedestrian shy” space on the 11th Avenue side of the building that faces the West Side Highway is $75 per square foot. Space on the 10th Avenue side of the building is going for $125 a square foot. Interested retailers have hailed from Europe, Breslin says.
Another Meatpacking building with space for rent is a three-story, 10,675-square-foot building, including basement, at 446 West 14th Street between Washington Street and 10th Avenue.
The building is asking $200 per square foot on the ground floor, and even the basement is going for $50 a square foot — double the rent for a prime retail spot in the neighborhood a decade ago.