As a result of testimony recently delivered at the Board of Standards and Appeals, we took a hard look at NoHo-Bowery retail and office space.
The BSA Commissioners were making a comparison of SoHo retail pricing with NoHo-Bowery retail potential pricing. What they overlooked in the anticipated earnings was the fact that SoHo/Broadway retail vacancies are now #1 in the City and simultaneously have commanded the highest increases in retail rent. A very recent survey indicates that at present SoHo/Broadway retail rents have dropped 8% over last year.
There is a worthy article published in March by The New York Times on New York City retail vacancies and outlines several causes, not the least of which is the rapid increase in online purchasing for everything from groceries to clothing.
In the last two months NoHo-Bowery has realized another phenomenon spreading throughout New York to fill the gap in long-term retail vacancies – the Pop-Up Store. Innovative, and for a small or specialized merchant an effective and cost-conscious way to get customer exposure or to introduce a product, an alarming number of these have morphed into events, promoted through social media, sanctioned by the Street Activities Permitting Office and attracting thousands of underground entrepreneurs who make bulk cash purchases of specially priced one-of-a kind sneakers, handbags, t-shirts, skateboards, jewelry and then sell them on the internet for 3-4X the original price. This is the new Mom & Pop retail.
NoHo-Bowery has so far been fortunate. Between the restrictions of M1-5b zoning with its wholesale requirement and lower, more attractive price points for smaller, largely design-oriented retailers, our retail environment has been healthy and so far compatible with the larger base of residential and live/work stakeholders. But that may change.
The stability of NoHo-Bowery’s residential co-ops and condos is increasingly dependent on their groundfloor retail rentals or condos. New builds and restorations may be basing their investments on out-of-scale retail pricing for the kind of wholesale-retail design tenants we prefer.
Can we sustain lower per square foot pricing and reap the benefit of retailers leaving SoHo/Broadway? With our current inventory of 5,000 sq. ft plus spaces can we attract unique lower-traffic retailers who will use the space for both wholesale/retail display and online order fulfillment? Will NoHo-Bowery’s notoriously protective residential stakeholders relax their standards regarding restaurants, traffic, quiet sidewalks, coveted privacy? Will these same stakeholders be able to balance the books for co-op and condo costs with lower ground-floor retail rents…or do without retail tenants entirely?
These are big questions, but the future of NoHo-Bowery hangs in the balance if we don’t consider them seriously. What truly distinguishes NoHo-Bowery is its long-time stance as a whole neighborhood – the conscious blending of residential, commercial and institutional collaboration and compatibility.
We need to talk.