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January 5, 2009  
 
       
 

UPSCALE EATS
FOR 34th STREET?


 

There are plenty of great retail options on 34th Street, including Macy's, Victoria's Secret, H&M, and Sephora. But if your palate matches your fashion, you'll have a harder time finding a restaurant. An initiative by BID 34th Street Partnership, which covers the area from Park to Tenth, is trying to change that.

 

We used a meeting with consultant John Harding (a Robert K. Futterman broker) as an excuse to eat at Bryant Park's Celsius restaurant and learn more. 34th is unique because it's built out already with a buzzing retail scene. Other submarkets, like the Bowery and TriBeCa, brought in high-end restaurants before residents and retailers. There's fast food now, but 34th has the foot traffic to support sit-down service, John says. There are 600k daily Penn Station riders and 52 bus routes. 38.5M people used the Herald Square subway station last year, while 10.2M used the 33rd Street PATH station.

 

The BID is working with landlords and brokers to bring in more upscale dining, negotiating leases to make the area profitable for full-service restaurants. Such tenants benefit landlords by serving a building's population and attracting visitors, John says. The initiative has already sprouted Lugo Caff? on 33rd and 8th (pictured) and Legends NYC on 33rd and 5th; The Irish Times is set to open soon at 254 West 31st, opposite MSG and next to Brother Jimmy's BBQ.

 

BID president Dan Biederman and VP Dan Pisark with John manning the booth at ICSC the other day. It's a busy time for the partnership, which will launch a new version of 34thStreetEats.com, as well as introduce key chain tags for restaurant discounts. It's also bringing Little Korea, just south of the BID, into the mix with its dining options. In the meantime, John, a restaurant consultant for 30 years, also brings officials from Spain to NYC to promote their wines and food through tastings.


TROPHIES!
 

Manhattan's trophies still outperform other office buildings, despite a 6.2% decline in asking rents to $103/SF over the past six months. And they'll continue to be attractive, Jones Lang VP Jim Delmonte told us at his E. 53rd Street office before he left for his Northern PA and Canadian vacation (apparently, he couldn't get enough of the recent snow). Landlords are aggressively lowering rents and offering concession packages. Tenants are waiting for the bottom of the market before making major decisions, but he thinks at that point there will be a flight to quality.

 

Effective and asking rates should continue to fall, bottoming out by the end of '09 and flattening by 2010. Overall Class A rents may decline as much as 25-30%. Other key findings in JLL's biannual Skyline Review: although rent reductions in Manhattan office space will be substantial, trophies should fare better. During the last cycle, Midtown Class A vacancy reached 9.5% while trophy buildings held firm at 7.3%. They also rebounded faster and steeper; with an 82% asking rent increase from '03-'07 versus Class A's 69%.

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