Lord & Taylor had no sooner finished a $12 million renovation of its 11-story flagship at 424 Fifth Ave. when word started to spread that the retailer was mulling adding a residential tower atop the store.
No plans have been filed with the city, and Lord & Taylor’s corporate parent, Toronto-based Hudson’s Bay Co., declined to comment on what a spokesperson termed “rumors.” But the development of an office and apartment tower along the city’s most expensive shopping corridor could be the latest sign of the times as landlords look to offset a continuing uptick in retail vacancies.
The availability rate for retail space on Fifth Avenue between 49th and 60th streets hit 17.4% during the first quarter, a 4.4% increase from the same period last year, according to figures from brokerage firm Cushman & Wakefield. Recent high-profile departures include American Girl Place leaving 609 Fifth for Rockefeller Center, Juicy Couture’s exit from 650, Forever 21’s closure at 640 and the exit of Sephora from 597. This is in addition to the 50,000 square feet of long-empty space at 530.
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The vacancies have put pressure on major landlords, including Joseph Sitt of Thor Equities, who is seeking buyers for large swaths of his Manhattan portfolio.
Retail rents in the first quarter were double what they were 10 years ago and, at an average of $3,123 per square foot along the corridor, are the most expensive in Manhattan, according to Cushman & Wakefield. Those rents are expected to come down if vacancies rise further.
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Lord & Taylor had no sooner finished a $12 million renovation of its 11-story flagship at 424 Fifth Ave. when word started to spread that the retailer was mulling adding a residential tower atop the store.
No plans have been filed with the city, and Lord & Taylor’s corporate parent, Toronto-based Hudson’s Bay Co., declined to comment on what a spokesperson termed “rumors.” But the development of an office and apartment tower along the city’s most expensive shopping corridor could be the latest sign of the times as landlords look to offset a continuing uptick in retail vacancies.
The availability rate for retail space on Fifth Avenue between 49th and 60th streets hit 17.4% during the first quarter, a 4.4% increase from the same period last year, according to figures from brokerage firm Cushman & Wakefield. Recent high-profile departures include American Girl Place leaving 609 Fifth for Rockefeller Center, Juicy Couture’s exit from 650, Forever 21’s closure at 640 and the exit of Sephora from 597. This is in addition to the 50,000 square feet of long-empty space at 530.
The vacancies have put pressure on major landlords, including Joseph Sitt of Thor Equities, who is seeking buyers for large swaths of his Manhattan portfolio.
Retail rents in the first quarter were double what they were 10 years ago and, at an average of $3,123 per square foot along the corridor, are the most expensive in Manhattan, according to Cushman & Wakefield. Those rents are expected to come down if vacancies rise further.
A version of this article appears in the April 17, 2017, print issue of Crain’s New York Business.
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