Are Luxury Retailers Making a Comeback in NYC?
Newmark is working with several luxury retailers interested in expanding their footprint in New York.
Luxury retailers seem to have a renewed confidence in the New York City retail market. Brokerage firm Newmark is working with several luxury retailers in the city that are interested in adding more locations, according to Newmark’s vice chairman Ariel Schuster.
Schuster has already closed a deal with Valentino. The retailer signed a lease totaling 8,718 square feet at 135 Spring Street in Soho. The new location includes 4,424 square feet on the ground floor and 4,294 square feet on the lower level. The location is part of a luxury shopping hub along Spring Street, which includes other major brands like Chanel and Burberry. Along with Schuster, Newmark senior managing director Ross Berkowitz and associate director Brandon Miller represented Invesco Real Estate, the property owner, in the deal.
Newmark is bullish on a rebound in the luxury retail market. Leasing activity started to resume in the third quarter of last year alongside job recovery in New York City. By the end of the third quarter, the market had regained 158,900 jobs that were lost since the onset of the pandemic.
Valentino isn’t alone. Gucci and outdoorsy brand North Face recently partnered to launch a pop-up location in Williamsburg, Brooklyn. In a transaction also negotiated by Schuster, the duo signed a 4,000-square-foot lease at 134 N 6th Street, a property owned by L3 Capital. The pop-up was one of five that operated in the US, and it was open through February 14.
Like the Valentino transaction, many saw the Gucci deal as a revival of the luxury retail market, and Schuster said that there has been a recent increase in outlying markets like Williamsburg for new locations. Warby Parker, Buck Mason, Everlane, D.S. & Durga, Madewell’s first men’s location and Lululemon have also recently signed leases nearby.
Optimism is increasing for a swift retail recovery. A recent survey from ICSC found that 60% of CRE leaders and 55% of retailers expect a return to pre-pandemic levels by the end of the year. This is welcome news considering that luxury retail sales took a significant hit in 2020. According to research from Boston Consulting Group published by The New York Times, global luxury sales are contracted as much as 45% last year. The report was published late last year, but predicted that sales wouldn’t return to pre-pandemic levels for two or three years.