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It may seem like every brand in the world is vying for a piece of Soho, but today's Wall Street Journal reports that some retailers have discovered that renting in less-bustling areas of Manhattan will save them a lot of money. Crate & Barrel spent three years looking for a second location for their hipper, less expensive CB2 chain before settling on a space at Third Avenue and 58th Street. The vacancy rate in that section of midtown is 11.4%, which gave CB2 more bargaining power than they would have had in, say, Times Square, where the vacancy rate is just 7.5%.
CB2's broker, Gene Spiegelman of Cushman & Wakefield, describes the current Manhattan rental situation as "a tale of two cities." The recession took a toll on expensive shopping areas and inspired nervous landlords to open their minds to less-sexy retail tenants like grocery stores—which is how Madison Square Park wound up with Eataly. But while strips like Upper Fifth Avenue have bounced back, places like Third Avenue in the 50s continue to struggle. The upside is that it's not just the CB2s of the world who are taking advantage of off-the-beaten-path deals. Call it wishful thinking, but maybe if rents stay low enough on side streets, mom-and-pop shops won't be priced out.
· Retail Tenants Face a Tale of Two Cities [WSJ]
· CB2 Replaces Duane Reade and Chase in Midtown [Racked NY]