Sign of the Times. Madison Avenue is For Rent

November 4, 2008 • Fashion


My friends who live other cities keep asking me, "is NYC retail suffering?" Well, if Madison Avenue is a barometer for luxury retail, then yes, it is.

Madison Ave. is feeling the sting of the
economic bite. New Yorkers and tourists are noticing more and more vacant storefronts, about twice
as many as normal. It’s not helping that in the city this fall,
tourism shows signs of slowing, layoffs are mounting and sales
expectations for the next several quarters are dropping.

“Between 59th and 72nd Streets, we have over 20 listings of available
space,” said Robert Futterman of Robert K. Futterman & Associates
LLC. “My take is that the rents have peaked and the landlords need to
come down to make some deals. The market, the tenant demands and
landlord expectations are going in different directions. It’s been
quiet. It’s really been quiet.”

The trend on Madison Avenue seems glaring compared to Manhattan’s SoHo,
Times Square and Meatpacking District, where the rate of availability
has declined, and Fifth Avenue, which has stayed stable, according to
Cushman & Wakefield. It’s also noticeably different from other top
venues in the country, such as Rodeo Drive in Beverly Hills or
Chicago’s Michigan Avenue, where the space remains relatively tight,
according to real estate executives.

But the vacancies along
Madison Avenue are apt to linger — unless rent rates drop sharply.
Rents remain as high as ever, at $1,000 to $1,200 a square foot between
57th and 72nd Streets, compared with $700 to $800 three to four years

Despite the negatives, there are still plenty of luxury brands considering Madison. High-end European
fashion firms scouting the avenue include Hackett, a classic British
men’s clothing and accessories firm; Façonnable, the Nice, France-based
fashion house known for its traditional styling, and Lanvin.

Loro Piana, which now has a
small store on Madison, is securing a larger space. Dolce &
Gabbana is in the market for an accessories concept and that Hublot
Geneve, the fine watch firm, is seeking a space as well.

American brands, Michael Kors and John Varvatos are said to be looking
for space, and Milly confirmed a search has been ongoing. David
Yurman is relocating to a bigger space in a landmarked
townhouse on 62nd Street in about a year. Graff just opened its new flagship at 710 Madison Avenue on the
northwest corner of Madison and 63rd.

Many of the vacant retail properties on Madison Avenue are smaller
sites or have architecture that would be challenging for fashion
presentations, and better suited for smallish jewelry firms. Some are
also next to more moderate priced businesses that aren’t the ideal
neighbors for luxury brands. They prefer to situate next to other shops
that draw similar customers.

“I don’t think the sky is falling,” said Jeffrey
Roseman, executive vice president of Newmark Knight Frank Retail. “Madison is pretty healthy. I think
retailers are still doing well.” However, he added, “The whole city is
going through a bit of an aftershock and I don’t mean the events of the
past few weeks. It’s been the past six months.”

Madison Avenue stands out from SoHo, the Meatpacking District, Times
Square and Fifth Avenue, where there are lower rents and a broader
appeal to high-end and moderate businesses. Those Manhattan markets
seem impervious to the recession, Futterman suggested. “Madison seems
to have been affected.”

Read "Madison Avenue Takes Hit From Economic Troubles" here

Source & Photos: WWD

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