NEW YORK CITY—A recent retail condominium acquisition on the Upper West Side that was made for a tidy sum—$20.5 million—might have been a surprise a few years ago, but today, it’s par for the course.
That’s according to several retail real estate experts contacted by GlobeSt.com, who say the market for retail condos has never been stronger. The 9,500-square-foot, ground floor property in question, 2770 Broadway, at 107th St., was purchased earlier this week by Walter & Samuels, a real estate firm, reports Crain’s New York Business.
“Before, there hadn’t been much turnover of retail condos, but the nature of the crunch in pricing has put landlords in a place where they’re trying to pull equity off the table,” explains David LaPierre, EVP, CBRE. “Retail condos have been a great way to accomplish that. In my 20-year career, I haven’t seen as many people evaluating retail condos as I’ve seen in the last four to five years.”
The deal in question, therefore, makes sense, LaPierre asserts. “The Upper West has been a healthy neighborhood, versus the tourist cores, where there’s been more swings in price. The non-tourist cores offer a more balanced investment because the prices didn’t dip as much but the returns are still good. Some investors are looking for that stability, whereas others are looking for more volatility.”
The price is a historical high, he adds, “but historically, we’ve never seen what we’re seeing now. So today, for a 9,500-square-foot space, that price isn’t crazy at all for Manhattan.”
Adds retail “queen” Faith Hope Consolo, chairman of Douglas Elliman’s retail practice, “It’s a testament to the strength of New York City retail, particularly the long term prospects. It’s also a vote of confidence in the Upper West Side/Harlem, which will continue to see better retail as stores and brands move northward (it’s been happening on the Upper East Side for some time now). The yield on the current leases already is impressive, and by the time those are up in seven years, so many more upscale brands will have taken spaces that this location will be in even higher demand. The sky may be the limit for the rent the owners will be able to charge by then.”
For the spot, the price “is a bargain,” she continues. “The corner of 107th Street is in a burgeoning section of the Upper West Side that has already seen a proliferation of new restaurants, gourmet groceries and boutiques. It is an exceptionally accessible block, well-serviced by public transportation and equi-distant to two subway stops. In the works nearby are two major mid-block residential Chetrit developments on 106th Street, between Broadway and Amsterdam avenue– practically around the corner – and 105th Street, between Amsterdam and Columbus Avenues. Moreover, 107th Street is close to Columbia University, Morningside Heights and Harlem. All and all, the retail at 2770 Broadway is extremely valuable on a well-positioned corner.
Ric Kaiser, Senior Executive Director at Cohen Real Estate represented both the buyer—David Berley, chairman of Walter & Samuels—and the seller, Charles Ackerman, founder and chairman of Ackerman and Co.