Retail At Essex Crossing Quickly Taking Shape
The 400K SF retail component of Essex Crossing, a 1.8M SF development on the Lower East Side, is quickly taking shape.
At the heart of the new retail will be an extensive network of local vendors taking 150K SF at grade level and underground along Delancey, known as the Market Line.
"We are using the current Essex Street Market as an inspiration to create a retail space similar to the Grand Bazaar in Istanbul, Pike Place Market in Seattle or La Boqueria in Barcelona," Prusik Group principal Rohan Mehra said. "This is something these other communities have had for a long time, but New York has never had before."
When construction is completed, Mehra expects to see 150 small-scale vendors, none of which will be national chains, hawking goods in spaces between 150 and 1K SF with the average vendor taking 500 SF. The Market Line will be a closed market but will have an open-air feel, with 65-foot-high ceilings surrounded by 45-foot-high glass walls to preserve the natural light.
As part of a request for proposals with the city, Delancey Street Associates, the development group behind the Essex Crossing development, is moving the 28 tenants currently in the Essex Street Market to a new location connected to the Market Line. In the coming weeks, Prusik Group will announce the first slate of 30 vendors that will comprise Market Line's first phase in the summer of 2018.
The city, which has owned and operated the Essex Street Market for more than 75 years, will continue to own it when the tenants are moved. Below the Essex Street Market's vendors, the next 90 vendors will come in two phases over the next three years, with 30 new vendors opening shop in mid-2018 and 60 to open in 2020.
Mehra said he would not disclose the asking rents for vendors, but the market environment allows the landlord to adjust rents based on what a vendor is selling.
"We can provide lower rents for someone who is selling something for a lower margin like meat or fish, versus someone selling goods with a higher markup,"Mehra said.
Market Line vendors will be provided with a variety of services that Mehra said are not normally provided to tenants from trash cleanup, sidewalk maintenance, snow removal and bathrooms so that they can focus on their core business of selling high-quality goods.
Perhaps the most unique quality of the Market Line will be the diversity of its tenants. Mehra said the Lower East Side has long been home to a diverse group of communities, representing people from all over the world and Mehra is working to make sure that all ethnic communities of the Lower East Side will be reflected in the vendors.
In addition to Market Line, the Essex Crossing developers have closed on a deal for a new Trader Joe's to lease 30K SF at the base of the mixed-use building at 145 Clinton St., and Planet Fitness will lease 22K SF in the second floor of the same building. NYU Langone Medical Center signed a 15-year lease taking 55K SF for an ambulatory facility at 175 Delancey St., and Regal Cinemas signed a 15-year lease for 65K SF on the second and third floors of the building on Essex and Delancey streets.
Although initially an Andy Warhol Museum was planned to lease 10K SF of cultural space, the Pittsburgh-based institution backed out of the project in March 2015. Mehra said the long wait for a world-class cultural museum to replace Warhol to fill the space will soon be over.
"We are in talks with a pretty exciting partner and will make an announcement about it in the next month or two," Mehra said.
Altogether, Mehra said that 200K SF of the 250K SF of the retail in the first phase is under contract to be leased, more than a year from when construction is scheduled to finish.
