News
A Walk Down Madison Ave
August 26, 2010
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| A slew of new deals to hit Madison Avenue affirm its position as one of the world's leading luxury districts, even in trying times. What makes it unique versus similar markets is that it not only has a worldwide client base, but an extremely strong local one, says Matthew Bauer, president of the Madison Avenue Business Improvement District, which covers the avenue and adjacent side streets from E. 57th to E. 86th. Here, he stands in front of the J. Crew Men's Shop, which opened this week. In the first half of '10, he says,19 new retailers signed deals on Madison, with 12 stores now under construction, including Bar Italia at 768 and Frey Wille (the Austrian jeweler, not the whale) at 727. This has been paired with an uptick in hospitality activity, including the re-openings of the Surrey Hotel and Mark Hotel. |
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| There's a tremendous sense of service Madison Avenue brands deliver—red carpet treatment, if you will—attracting visitors to the neighborhood, Matthew says. He also credits the magnetism of the neighborhood to the BID's initiatives, which introduce Madison Avenue to visitors and locals on a more personalized and charitable scale. Its programs include April's Platinum Jewels in Bloom event, which focused on 30 of Madison's jewelry stores and raised money for the Playground Partners of the Central Park Conservancy(above); May's Madison Avenue Gallery Walk, which featured 60 of the area's galleries and raised money for The Fund for Public Schools; and the annual Miracle on Madison Avenue holiday event, which brings shoppers and merchants together to help The Children's Aid Society. The BID also partners with Tokyo's Marunouchi District, Japan's own Madison Avenue. |
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| When you think of Madison Avenue, retail invariably pops into your mind, so we took a walking tour of the neighborhood with Prudential Douglas Elliman's queen of retail, Faith Hope Consolo. Madison Avenue's retail market was not immune to the recession, she tells us—last year, it saw the highest vacancies it's seen in a decade. But the holes have been filled in, and we're now seeing the lowest availability in 18 months, at under 5%. We snapped this of Faith, left, in Longchamp's new store at 713 Madison, one of the many luxury retailers who've made deals in the down market—and Faith, who's been involved in at least 20 Madison Avenue transactions this year, says there's been a deal signed on every single block from E. 52nd St. to E. 72nd St., including Kimaya and Devi Kroell at 717, and ToyWatch at 509. |
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| Madison Avenue is no longer just about the luxury retailer or jewelry store—deals are getting done whether you're a mom-and-pop or an international boutique. Above, Faith stands in front of the soon-to-be DeLaneau store at 681 Madison—its watches start at $500k (!), she notes. But don't think of Madison Avenue as unaffordable—it also has plenty of more cost-conscious options, like Ann Taylor's flagship store at 645, Crate & Barrel at 650, and UGG Australia, which recently signed a lease at 600. And when there's availability, there's plenty of interest—retailers were particularly intrigued by the retail component of the mixed-use Carlton House, which was purchased for $170M earlier this year. It's now home to Judith Leiber, Bond No. 9, John Lobb, Aaron Basha, Robert Talbott, Leggiadro, and Christofle Pavillon. |
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| Source: Madison Avenue BID |
| In a particular testament to Madison Avenue, Longchamp is not leasing its space—it instead purchased the entire building, once home to Waterford Crystal, for over $40M. Retailers realize this as a street where brands can be made, Faith says. Just look at some of the designers calling Madison Avenue home: Roberto Cavalli has a flagship at 711, Sonia Rykiel operates a boutique at 849, and Michael Kors opened not one, but two stores, at 974 and 667. And many international retailers like DeLaneau, Orianne Collins, Frey Wille, Hublot, and Vacheron Constantin have chosen the street for their first US locations. If Madison Avenue can be summed up in one word, it would be "resilient," says Faith's partner Joe Aquino. |
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| ToyWatch's space, in particular, had remained vacant for over a year before the Italian retailer signed the lease—but everyone and "their dog, cat, and parakeet" called to look at the space, says Kensico Properties EVP Alan Zimmerman, whose firm owns 350 Madison and 509 Madison (above). There was particular interest from European tenants, he notes. And retail's not the only sector garnering attention, but office space as well. Pre-built space under 5k SF is snapped up quickly by tenants like money managers and hedge funds, while larger units—like the 17.5k SF availability at 350—are harder to move, he says. The firm's last batch of three pre-builts at 509 were closed within a month, and Kensico plans to develop more. |
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| Despite larger units not moving as fast, Kensico Properties is cautiously optimistic about the market, Alan says—with emphasis on optimistic. If it didn't have faith in the market, it wouldn't be transforming the 400k SF 350 Madison, which was built in 1922. The owner is replacing the building's brick with a new aluminum and glass facade, and is enlarging the lobby, which will include a 30-foot waterfall (above). The renovations were designed by Moed de Armas & Shannon's Dan Shannon, and will be completed in November. Madison Avenue is gradually reinventing itself from the old brick facades to a more modern look, and Kensico is following that trend, he says. |
