retail

Madison Avenue’s Luxury Retail Landscape Faces Seismic Shift

By Columbus International,30 August 2024

New York City’s iconic Madison Avenue, long synonymous with high-end retail and opulent shopping experiences, is on the brink of a dramatic transformation. The stretch where East Midtown meets the Upper East Side is poised for significant redevelopment, promising to reshape the skyline and redefine the luxury shopping corridor.

Two major office-retail complexes are slated for demolition, making way for mixed-use projects shrouded in mystery. Meanwhile, the future of the former Barneys building, vacant for four years, remains a subject of intense speculation among fashion aficionados and real estate moguls alike.

In a blockbuster move, Related Companies, helmed by CEO Jeff Blau, is set to raze 625 Madison Avenue. The plan? A mixed-use supertall tower potentially soaring over 1,200 feet, featuring luxury condominiums, high-end retail spaces, and possibly a hotel. The nine-month demolition process has already begun, with scaffolding enveloping the property.

Not to be outdone, 655 Madison Avenue is also on the chopping block. The 24-story building, owned by a joint venture including Jamestown and Williams Equity, is destined for a similar fate. Michael T. Cohen, co-principal at Williams, has hinted at a “mixture of retail, hospitality and residential” for the prime location.

These developments have sparked a retail exodus, with notable departures including Marc Jacobs from its prominent corner location at 655 Madison. The designer’s promised relocation to Fifth Avenue remains unconfirmed, adding to the air of uncertainty.

Across the street, the elegant 10-story former Barneys building at 660 Madison Avenue continues to perplex industry insiders. Owner Ben Ashkenazy’s bold claim of an impending $1 billion sale to “one big retailer” has raised eyebrows and, reportedly, frustration among investors.

Despite these upheavals, Matthew Bauer, president of the Madison Avenue Business Improvement District, remains optimistic. He emphasizes the avenue’s unique appeal to a local customer base and sees the new developments as opportunities to enhance the district’s allure. “These new buildings will not only bring new shopping and hospitality venues to the district, they will bring residents who shall be clients for our stores, restaurants, spas, salons and galleries,” Bauer states.

The redevelopment trend extends beyond these flagship locations, with projects like the Giorgio Armani residences at 760 Madison and Naftali Group’s ventures at 1045 and 1165 Madison Avenue setting precedents for luxury mixed-use developments in the area.

While some see challenges, others spot opportunities. An anonymous retail broker notes, “Any time stores close due to new development, it’s good business for other landlords — and for us. The stores have to find somewhere to go, and there are lots of places to go right now.”

As Madison Avenue braces for this seismic shift, the future of New York’s luxury retail landscape hangs in the balance. With billions of dollars in play and the potential for groundbreaking architectural additions to the skyline, all eyes are on this storied stretch of Manhattan real estate. The coming months and years promise to reveal whether these ambitious plans will reinvigorate Madison Avenue’s cachet or fundamentally alter its character in the ever-evolving world of high-end retail and real estate.

Source: New York Post

Manhattan’s Retail Renaissance: Storefronts Surge Despite Economic Headwinds

By Columbus International,26 July 2024

In a striking display of resilience, Manhattan’s retail sector is experiencing a robust revival, according to a recent report from the Real Estate Board of New York (REBNY). The first half of 2024 has seen a surge in storefront activity, particularly in the small to mid-sized market, with the food and beverage industry leading the charge.

This resurgence comes as welcome news to a city still grappling with the aftermath of the pandemic. Despite rents hovering 20% to 30% below pre-COVID levels, demand for retail spaces remains strong, driven by a potent combination of rebounding tourism and the gradual return of office workers.

Keith DeCoster, REBNY’s director of market data and policy, notes, “Surging tourism invigorated Manhattan retail in 2022 and 2023.” This trend shows no signs of slowing, with New York City cementing its position as a top destination for sports tourism, bolstered by events like the 2024 Cricket World Cup.

The retail landscape is evolving, with savvy businesses adapting to new market realities. As prime locations in SoHo and Madison Avenue become scarce, retailers are exploring opportunities in less traditional corridors. The Penn District and Avenue of the Americas are benefiting from increased office activity, while residential neighborhoods like the Upper East and West Sides are seeing an influx of diverse businesses, from apparel stores to comedy clubs.

However, the recovery is not uniform across the borough. Times Square, once the beating heart of New York’s tourist economy, continues to struggle. DeCoster cautions, “Tourism and return to office remain below pre-Covid peaks, and lagging neighborhoods and pockets of vacancy underscore the reality that retail businesses still face significant obstacles.”

The city is not standing idle in the face of these challenges. Initiatives like the City of Yes: Economic Opportunity plan aim to streamline zoning and ordinances, potentially accelerating the filling of vacant storefronts and revitalizing streetscapes.

As Manhattan’s retail sector navigates this complex landscape, one thing is clear: the borough’s legendary resilience and adaptability are once again on full display. With continued innovation and support, New York’s storefronts are poised to write the next chapter in the city’s enduring retail story.

Retail Renaissance: U.S. Shopping Defies Odds as Investments Surge and AI Revolutionizes the Landscape

By Columbus International,30 January 2024

Amid global uncertainties and cautious anticipation at the National Retail Federation’s Big Show, U.S. shoppers continue to defy predictions, propelling retail sales and inspiring confidence among major global retailers. The recent Commerce Department report revealed a higher-than-expected rise in December sales, fueled by online purchases and motor vehicle transactions. Senior executives, gathered at the annual expo, are shifting focus from a decade of retrenchment to discuss expanding store portfolios. Despite concerns about the economy and pandemic aftermath, retail real estate fundamentals are predicted to remain robust in 2024.

CBRE forecasts a decrease in the retail availability rate and a rise in asking rent growth, signaling a positive outlook for the industry. While low-income households face financial challenges, economists anticipate sustained consumer spending, provided the labor market remains stable. Traditional mall-based retailers are adapting by closing underperforming stores and turning to smaller, open-air suburban centers for expansion. CBRE predicts that neighborhood and strip centers will maintain occupancy, while mall and lifestyle centers may experience a slight increase in vacancy rates. Industry veteran Stephen Sadove predicts a “reversion to the mean” in 2024, envisioning a post-pandemic world with e-commerce returning to pre-COVID growth patterns.

Despite the rise of AI and other technologies, Sadove remains optimistic about physical stores, citing a net increase in store openings in 2023. The NRF Big Show highlighted the retail industry’s fascination with artificial intelligence, with AI solutions permeating discussions and expo displays. Google Cloud’s Amy Eschliman sees generative AI as a transformational force akin to the internet and mobile phones, capable of revolutionizing customer and associate experiences. Macy’s CFO and COO Adrian Mitchell emphasizes the positive impact of AI on pricing science and inventory allocation, stressing the need for retailers to embrace innovation actively. Ulta Beauty CEO Dave Kimbell sees AI as a tool to complement human connections, enhancing guest services and personalization without sacrificing the essential human touch in retail.

Source: Bisnow