Neighborhood Tour: A Look At Soho's Rich History
Steeped in history and cast iron, Soho has grown into a hotbed for retail and residential activity. Average asking retail rents hit $535/SF in the summer of 2015, a nearly 14% climb from Q3 2014. Median listing price for homes currently sits at $3.5M.
New York Historical Tours tour director, historian Kevin Draper and Eastern Consolidated principal Adelaide Polsinelli show us a neighborhood that was founded by industry, invigorated by artistry and very nearly wiped out long before it could become one of the most expensive neighborhoods in Manhattan.
The neighborhood derives its nickname from its geographic location (South of Houston Street) and spans approximately 500 buildings across more than 25 blocks.
Kevin says that about 250 of Soho's buildings are cast iron.
Before modern construction began to hinge on steel and glass, cast iron served as "the next big innovation," and a step above brick and mortar. Considered both very strong and relatively fire resistant, cast iron was a cheap, yet effective option for builders in early Manhattan.
The strength of the material allowed for higher ceilings, an ideal amenity for factories and warehouses. Between the mid-19th and early 20th centuries, a construction boom made Soho one of the most concentrated collections of cast iron construction on the planet.
Although Soho rose to prominence as an industrial epicenter, it ultimately evolved into something much different. Kevin tells Bisnow that the neighborhood's shift toward bohemia in the late '60s would kick off the beginnings of gentrification in New York.
"It was the first major repurposing of buildings," Kevin says.
Properties built to cater to the manufacturing culture of the area began to take on new life as residences and art studios. By the '80s, prices began to rise. Rock icon David Bowie and other like-minded artists took up residence in Soho, boosting its cachet.
Adelaide points out that Soho was one of the first places that had IMDs. She explains that artists would take up residency in commercial properties because they couldn't afford the rent in local apartment buildings. (Sound familiar?)
They took raw space that wasn't really manufacturing or office and turned them into homes. A popular trend in the mid-'70s and early '80s, these makeshift residences were protected by the city. The ultimate result was rent-stabilized housing throughout a large portion of the neighborhood.
"The boogeyman word of gentrification can lead people to think that they are going to get thrown out of their building," Kevin adds, saying it can often be associated with the displacement of residents. "Actually, a lot of the artists in Soho were protected during this shift and still are."
Kevin says the changing culture of Soho may have increased values and appeal, but those who had already staked their claim before the rush were able to stay in the neighborhood.
Adelaide tells Bisnow that many residents from this time period have become very wealthy.
In fact, Adelaide herself benefited from Soho's rise. She got her start in real estate by advising her family in the sale of their property at 475 West Broadway. The mixed-use building now houses a Dos Caminos restaurant and sold for about $300k in the early '90s.
Trendy retailers and eateries (such as the Starbucks pictured above) are drawn to present-day Soho. While the tenants of the neighborhood may have modernized, the building exteriors are tied to tradition. The commitment to the past is not unjustified.
Before Alexander Hamilton's life story dominated the Broadway box office, he captured the nation's attention while teaming with Aaron Burr on what Kevin describes as "the OJ trial" of the time period.
In 1800, Hamilton and the man who would eventually kill him headed up the defense team for Levi Weeks. Weeks was accused of killing Gulielma Sands, after her body was found in a well. He ended up being found not guilty. The well still stands on the bottom floor of a Soho boutique.
Soho was also the site of one of Tiffany's first stores. In 1837, the now world-renowned jeweler set up shop in the neighborhood and sold a range of luxury goods spanning from fine stationery to fashionable furniture.
Kevin tells us the store's buyers were able to acquire fine jewelry at low prices while canvassing Europe because unrest had led to many socialites liquidating their stash of elegant trappings before fleeing. The store began to focus on that niche of their product line and today is arguably the flagship brand in the space.
So how does this history impact modern commercial real estate?
In today's world, it can be hard to imagine a company like Apple having to make concessions for any landlord. In fact, the coveted tenant is the only retailer in Grand Central Station to be excused from paying a portion of its sales profits to the landlord.
But Soho is less flexible than one of the most iconic transportation hubs on the planet. Adelaide says the tech retailer was unable to bring its signature look to its current Soho location, 103 Prince St, despite being responsible for boosted foot traffic and rising retail rents across multiple nearby blocks.
A former post office, the building features earthy tones and a plain design that blends with the surrounding properties.
"This is a great example of the cast iron architecture," Kevin says. "An interesting thing is that it was purposely painted to look like stone."
Adelaide points out that any landlord that wishes to paint a building in Soho only has about four general color options to choose from in order to blend into the historical character of the area. While some disagree on exactly which colors are acceptable, the rule of thumb is the new paint must match a color that already existed in Soho during its industrial beginnings.
This vibrant neighborhood that offers both old world charm and high-level leasing was almost wiped from the face of Manhattan before it had truly grown into itself.
Robert Moses, the endlessly influential power broker, tried to build a 10-lane highway called the Lower Manhattan Expressway across where Soho currently stands. Obviously, the neighborhood would have been leveled.
Had the highway been built, it would have stretched from the Holland Tunnel in New Jersey and split after crossing Manhattan, allowing travelers to connect directly with either the Williamsburg Bridge or the Manhattan Bridge.
Kevin says the project was first suggested in 1929 but various delays caused it to be put off for decades.
"In the '60s, this was on track. This was a done deal," Kevin tells us.
Despite his many successes, such as the creation of locations for two World's Fairs, the construction of the West Side Highway and the development of FDR Drive, this idea was thwarted by a grassroots campaign.
"This is where he was finally stopped," Kevin says. "He was beaten by pretty much one person. Her name was Jane Jacobs."
Fueled by her love of Washington Square Park and the rest of her neighborhood, Jane helped rally the community against the demolition. Had Jane failed, Manhattan's modern-day landlords would have never been able to add some of the highest retail rents in the city to their portfolios.
The most recent average asking rental rates in Broadway between Houston and Broome alone sit at nearly $830/SF, according to REBNY.
The high prices are helping to set the pace for the neighborhood that, as mentioned previously, sustains asking rents in the mid $500s on the whole.
Despite the steep prices, the neighborhood is actually encountering a bit of a correction. Despite this, Adelaide tells Bisnow that Soho hasn't lost its shine. She says that a reorganization of retail in the neighborhood is taking place.
"Many of the existing retailers are moving to different locations, but for the most part, they're staying in Soho," she says.
Adelaide tells us that pricing on Prince and Spring streets "really went off the charts" as did Broadway, but retailers are finding new homes amongst side streets.
"The neighborhood still has strength, and will always be a solid tourist and shopper mecca." she says.
