Robert Futterman talks New York retail, from the mom-and-pop shops to Wal-Mart in the city to the upper-end merchants going into the revamped Plaza Hotel
By Tom Acitelli
New York retail is about making a statement, according to Robert Futterman, founder and CEO of retail brokerage Robert K. Futterman & Associates. And that statement is increasingly more expensive. Retail rents in the city’s choicest corridors have risen to several hundred dollars a square foot annually, and recently arrived national chains have eased out longtime mom-and-pop stores, especially on Manhattan’s more heavily traveled avenues.
Still, Futterman, whose firm handled the retail in the Time Warner Center and is now marketing the retail in the Plaza Hotel, said in a recent podcast that he sees a continued diversity in New York City retail. Futterman talked of the retail potential for the South Bronx, for the Meatpacking District, and for the Plaza, pulling the curtain back for the first time publicly on which retailers might end up in the iconic hotel-turned-partly-condo.
The podcast can be heard at www.therealdeal.com.
THE REAL DEAL: Will Wal-Mart, the world’s biggest retailer, ever land in New York City?
Robert Futterman: I think with some patience and persistence, I think it’s possible that Wal-Mart will find an as-of-right location, which would make a lot of sense. I think, in some senses, they’ve been vilified in the press without any real cause or substance.
We’ve got Kohl’s and we’ve got Target and we’ve got Costco, we’ve got BJ’s, Bed Bath & Beyond. We’ve got big-box caliber tenants, and they don’t seem to have hurt neighborhoods.
As a matter of fact, they’ve seemed to create jobs and tax revenue. It’s been a real plus, so I think people are taking what Wal-Mart stands for the wrong way. And I hope they will end up in New York City sometime in the future.
TRD: Can you put a timetable on it?
RF: I think it could be in the next five years. I think the outer-boroughs makes sense. Manhattan is probably too expensive. However, Manhattan does have some sites that are as-of-right that are big enough.
TRD: The Gateway Center mall is under construction in the South Bronx. What is the future of retail in the South Bronx?
RF: Absolutely phenomenal. I think it’s a totally untapped market. The demographics are there. You’ve got the population. Any time you can provide an opportunity for people to shop in the boroughs rather than in the city that they haven’t had before, you’re catering to a local market. So, people in the South Bronx and in the Bronx, in general, and even in Upper Manhattan [wouldn’t] have to travel too far.
TRD: Why has the Meatpacking District become appealing for higher-end retailers?
RF: I think the nice thing about he Meatpacking District is the low-rise nature of the buildings. The zoning does not allow residential conversions in the Meatpacking District proper.
So, fundamentally, what you have is a location that has so much charisma and character that is accessible to so many local New York City people and to international tourists and domestic tourists.
People compare it to Soho 20 years ago. Because of its proximity to the High Line and the Hudson River, I think it’s got even more of an aesthetic and really has a chance to outperform Soho.
TRD: What sort of prices do you see for retail space at the revamped Plaza Hotel?
RF: Prices on Fifth Avenue, from 49th Street to 59th Street, are probably in the $1,000-a-foot-range.
The Plaza Hotel will offer opportunities to tenants that can’t find small spaces on Fifth Avenue a rent level that’s going to be much more affordable. We’re creating a shopping arcade and a collection of shops that’s going to be like nothing New Yorkers have ever seen before.
TRD: In what sense?
RF: It’s going to be extremely high-end. It’s going to be a combination of great architecture, great history, food and beverage, best restaurant in the city, catering, retail, accessories, fashion, jewelry, cosmetics-it’s going to be an icon in New York forever.
TRD: How much of a higher-end retailer’s concerns in Manhattan surround branding rather walk-in business?
RF: I think in New York, probably more than anywhere else, that’s the case. New York is about making a statement, how you’re viewed by Wall Street, and you have an opportunity to get more footsteps than anywhere else in the country.
So, a tenant like an Abercrombie & Fitch can come to Fifth Avenue-a deal we were involved in-and make a statement, and to the sales volume.
Yes, it’s advertising, it’s making a statement, it’s a showcase-but, at the end of the day, these tenants can do big volume.
TRD: What’s the future of the mom-and-pop store in Manhattan?
RF: New York has always been a melting pot for national chains and for mom-and-pop entrepreneurial stores.
So, I think you’ll continue to see mom-and-pops operate.
They can thrive, not just on the avenues, but on side streets. I don’t think a lot of mom-and-pops have been forced out of New York. I think a lot of them just have had to rethink their strategies and reinvent themselves.