SITUATION
New construction is often the most challenging type of retail space to lease in New York City. Installations are expensive, space is normally delivered raw, and physical conditions for construction can present major obstacles to tenants. The Durst Organization’s Via project at 625 West 57th Street is one of the most uniquely designed buildings constructed in New York City in many years. In addition to over 700 apartments, there is approximately 45,000 sf of retail space. Given VIA’s location on the extreme West Side of Manhattan, an area where pedestrians rarely venture, finding retailers could be more challenging still.
STRATEGY
The Dursts brought in Peter Braus and Brad Schwarz to create a leasing strategy that would overcome these significant impediments. First, a marketing piece was created that not only featured the exciting design of the building, but also emphasized the population explosion occurring from the West 40’s up to the low West 60’s along 11th and 12th Avenues. This is a chronically underserved area, with thousands of new apartments coming on line over the next few years. Part two of our strategy consisted of focusing on the relative affordability of the rent in this area. Many tenants looking to appeal to high density, affluent residential populations have been priced out of the market, and we felt very strongly that the retail at Via offered an opportunity to get a toehold in this emerging market and make an excellent deal.
OUTCOME
A little over a year into the project, our results have been excellent. We successfully leased approximately 7,000 sf to The Livanos Restaurant Group (Oceana, Molyvos, etc.) to do a mid-priced, casual bar and restaurant that will service over 1,200 residential units among Durst’s three buildings on this block. Second, we recently signed a 4,000 sf deal with the American Kennel Club (AKC) to do their first retail dog-care location. This will be a full service boarding and grooming outlet bearing the prestigious AKC name. Both of these will be great amenities to the buildings. Finally, we have a lease out with a very exciting entertainment use that will occupy approximately 25,000 sf. Hopefully we will complete this deal, which will leave us with approximately 7,500 sf of infill retail, which we will be able to lease at premium rents, as has been part of our strategy. Overall, we expect to average about $80-$90 psf for the total lease-up, which exceeds the originally pro-formaed amount for the project. Most importantly, the tenants in the project will complement and enhance the ultra-premium residential units and reflect well on this billion-dollar project. Most impressive, all of the tenants procured for the project to date have been obtained entirely by Braus and his team, demonstrating the aggressiveness with which they approached this project.