Improving Fundamentals Push Flagships to Boroughs

Part 2 of 2

NEW YORK CITY-In part one of this two-part interview with Thomas E. Dobrowski, managing director with Rockwood Real Estate Advisors, a subsidiary of Auction.com, he noted that “Investors can continue to witness growth in 2014, especially in Brooklyn where Manhattan vacancy rates and asking rents price out many retailers looking to expand.” He also pointed out that asking rental rates in the region are at an all time high. In discussing job growth, tourism and boroughs in part two of the interview, Dobrowski notes that “New York City has surpassed its pre-recession employment totals and consumer confidence continues to grow.” 

GlobeSt.com: Are you seeing tourism and job growth have a major effect on retail revival in the City? Are retailers looking to expand?

Dobrowski: As New York City's economic landscape continues its rapid growth, stimulated by prospering tourism and robust job growth, several key retailers are prompted to expand and capitalize on elevated spending and consumer confidence levels. New York has witnessed a 52% increase in international visitation since 2006, with a significant number of these tourists being European affluent shoppers that frequent restaurants and luxury retail districts. The significant portion of foreign retail consumers in New York makes the metro less susceptible to domestic economic issues that could otherwise directly affect consumer spending elsewhere in the US.

GlobeSt.com: Are you seeing more demand in the boroughs than years past?

Dobrowski: New York City has surpassed its pre-recession employment totals and consumer confidence continues to grow. As a result of the continuously improving fundamentals in the metro, several retailers are opening flagship stores in the boroughs, particularly in Manhattan and downtown Brooklyn, where asking rents have surpassed pre-recession levels. One of the Brooklyn's largest developments which is currently under construction is City Point, located in downtown Brooklyn, offering over 650,000 of high-end retail space in addition to 1.2 million square feet of residential space.

GlobeSt.com: How is the auction retail market? Any different than years past? Where do you see it going? Anything to be on the lookout for?

Dobrowski: The auction retail market has continued to be optimal for those investors seeking opportunistic returns through value-add strategies in retail assets across the county.  As commercial real estate market fundamentals continue to improve, be on the lookout for more core properties marketed through the auction format which will, in turn, attract a new group of investors seeking stabilized returns.