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To compete in this economy, shops have to pop.
From Printemps at One Wall Street and Prada on Fifth Avenue to Pop Mart in the Oculus and virtual reality at Meta’s Fifth Avenue outpost — retailers are luring crowds with festive atmospheres that add energy to the streets. But to make a big impression, you’ve got to have a front-and-center space.
“Almost every high street has had an unbelievable year,” said Joe Hudson of CBRE.
Jared Epstein of Aurora Capital Associates — whose company owns retail in several hot neighborhoods — explained that the strong market means that the best spaces are drawing multiple offers, even while they are still occupied.
“Deals are being done quickly, and brands are willing to pay a premium for true flagship locations that deliver foot traffic, visibility and an experiential backdrop you simply can’t replicate online,” Epstein said.
Just look at Printemps, said Jackie Totolo of Newmark, as it’s become a new downtown destination. “It’s monumental how they converted the lower stack [of One Wall Street] into beautiful retail,” she said.
The new Aritzia in the Flatiron at 115 Fifth Ave. is another example.
Monos at 120 Mercer St., in the rear of the Scholastic Building, is also a standout. The building was recently purchased by Empire State Realty Trust, which will add amenities for office tenants. Nearby, Lululemon has drawn attention by flipping the menswear to the ground and moving women’s stretchy things upstairs.
“Niche brands want to be in Soho where fashion and art come together,” said attorney Clara Feldman of Blank Rome who represents retailers.
Every brand is chasing the Gen Z dollar. A recent Bank of America Global Research study found Gen Z’s global income will hit $36 trillion in five years. They may have only spent $2.7 trillion in 2024, but that will rise to $12.6 trillion by 2030. “They continue to spend up in a down market, which is very unusual,” said Robert Cohen of Newmark.
One thing Gen Z is spending big on is second-hand luxury. “Resale is now a central high street category,” Cohen said, pointing to stores like the Real Real and Rebag.
Uptown isn’t immune to the creep of cool luxury, either. Clubs like Casa Tua at 20 E. 76th St. and Maximes at 848 Madison have created a “ripple effect” on Madison Ave. by bringing in new shoppers and brands. Susan Alexandra, which is also on the Lower East Side, will open at 1088 Madison with in-store experiential moments. The French fashion company Sézane — which has outposts in Nolita and Williamsburg — just leased in the base of the Benson, Naftali Group’s luxury condominium at 1045 Madison between East 79th and 80th streets. Le Labo is already there.
A few blocks north, Tuckernuck at 1121 Madison Ave. was designed to feel like the interior of a home with antiques and curiosities while Swarovski, Frédéric Malle and Todd Snyder are in the base of the Bellemont, which Naftali Group developed at 1165 Madison at East 86th Street.
“Brands that fought to get into stores in the 70s on Madison are now fighting to get into stores in the 80s,” said Sara Armet of Mantis, who organized the Holiday on Madison pop-up at 804 Madison along with Jennifer Bernstein from Newmark. The pop-up featured over 60 emerging vendors.
“People aren’t there just to shop, they’re also coming to dine, exercise, be pampered, socialize and experience the city,” Armet said. “Brands are having fun and taking risks and doing a lot more experiential moments and finding unique ways to connect with their customers.”
An avenue over, Moncler will open in the spring at 767 Fifth Ave. by the Apple Cube, according to Steven Soutendijk of Cushman & Wakefield who is now marketing the former Dior location on the building’s north side.
In Midtown, Totolo’s tenant, Bonhams, will open on Feb. 9 at 111 E. 57th St. The next block east on Billionaires’ Row between Sixth and Fifth avenues has been decimated by demolition but will soon get shovels in the ground for new towers with retail bases.
And further east, Gary Barnett’s 74-story tower at 655 Madison Ave. is expected to host a flagship for Chanel. Prada may have to relocate when Related helps it develop another luxury condominium tower on its site at 720-724 Fifth Ave., while LVMH is developing a new 25-story tower to host its 1 E. 57th St. corner store and offices.
Further south, Barnett will construct a now larger, 1.6 million-square-foot office tower at 570 Fifth with an Ikea at its base.
There are numerous large locations available in Times Square that will need to be divided up into smaller spaces. “It’s about creating configurations that the tenants want,” Soutendijk said.
Hudson Yards continues to innovate as Related repositions tenants to fix the mix. “There are new concepts on the third floor, and they are shifting traffic patterns,” said Armet.
In the Meatpacking District, Baccarat moved from pop-up to a permanent store at 33 Ninth Ave. “It is trying to rebrand to a younger audience, and the market has totally changed,” Feldman said. “Gen Xers are now looking at buying the Baccarat bar and stem wear.”
The Whitney Museum boosted that market and soon, a 600-unit apartment tower will add both office workers and new residents, eager to shop and dine. STK will move from Little W. 12th St. to the former Salt Bae space at 412 W. 15th St., which was marketed by a Cushman & Wakefield team led by Soutendijk.
“If you are not already in Meatpacking it will be on fire and whatever space is left the luxury brands will continue to fill,” said Armet.
Although the West 34th Street corridor has been a laggard, Vornado’s investment in the Penn District is improving the area with new office tenants, Life Time Fitness pickleball courts, new bars and eateries. Nearby, at 150 W. 34th St., Primark’s opening will create “excitement” in the market.
“We will now transform the entirely old, may I even say, junky retail on both sides of Seventh Avenue and along 34th Street that we inherited into attractive, modern and exciting retail offerings,” said Steve Roth, Vornado’s chairman, during a November conference call.
Government cheese
Ongoing purchases of retail stores by new investors are reaping extra revenue for city and state coffers.
The December investment by the Paris-based private equity investment group, Ardian, into fashion conglomerate Kering’s 115,000-square-foot retail and office condominium at 717 Fifth Ave., revalued the joint venture at $900 million.
The transactions spun off $14.17 million in transfer taxes to the Big Apple with another $3.51 million to the state. A Kering entity also obtained a new $450 million mortgage from Credit Agricole that generated $4.16 million for the transit system with another $8.43 million for the city.
In 2024, the sale of the same 717 Fifth condominium property to Kering for $963 million generated $25.3 million for the city and another $6.26 million for the state.
The seller, Jeff Sutton, was also behind last year’s $213 million sale of the Nike store at 529 Broadway in Soho to Ikea, which added $5.59 million for the city and another $1.38 million for the state.
The city also reaped just over $1 million on the May transfer of the entity that owned numerous Walgreens and VillageMD locations to Sycamore Partners.
While not strictly a retail sale, last year’s largest office transfer of 590 Madison Ave. for $1.1 billion — which included land on East 57th Street — added $28.35 million to city coffers and $7.02 million to the state. It will also make ongoing payments of more than $25 million each year in property taxes to support city services.
