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This spring, the Prada store in Soho agreed to pay over a grand per square food in rent—numbers previously unheard of south of Midtown. The demand for rent in the shopping district has become extraordinary, with prices rising faster than in any other area of the city.
Footing the bill is no easy task, and it takes a lot of retail muscle to do so. The Observer notes that big brands (the Pradas and the Zaras of the world) can afford locations that might cost more to operate than unit sales can support, because they have a worldwide network of stores to make up the difference. The brand value of being in Soho is worth more than the profitability of the individual store.
"The market for a Soho store is no longer Soho residents or even New Yorkers, it's the global elite who are flooding New York with enough capital to support not only one or two, but three and maybe even five or six luxury districts," the Observer writes. Naturally, independent stores can't compete, but neither can restaurants, laundromats, or grocery stores.
Extreme rent values afforded exclusively by major fashion brands are pushing out businesses necessitated to make Soho a neighborhood and not just a shopping district. One upside: nights in Soho are dead quiet. "Soho has become like Madison Avenue—deserted in the evenings," said Cesare Bruni, co-owner of Boom, which was priced out of its Spring Street space last year. "The stores become like phantoms at night."
· Prada Intifada: Luxury Chains Driving Soho Rents to Record Levels[Observer]
· Prada Will Stay in Soho, Agreeing to Record Breaking Rent [Racked NY]