Times Square strong location for retailers - Brief Article

In the wake of Sept. 11, everyone connected with the retail industry began asking the same question: How have things changed? While the answer is still being determined, in many respects there seems to be a clearer answer for Times Square.

Frequented by up to 500 million people per year, Times Square is, arguably, one of the city's finest retail locations for the right retailer. Even though this 500 million count has been reduced temporarily as a result of Sept. 11, Times Square is still visited by a staggering number of tourists, professionals and residents working and shopping within a very compressed area. When coupled with the television exposure that comes from ABC's studios, MTV, and the New Year's eve celebrations, a retailer has an extraordinary opportunity to combine advertising with retail sales. And, it's not only about retailers, as there are major corporations that are contemplating combining a branding opportunity with a corporate showcase because of this unequalled exposure. In keeping with NASDAQ and Reuters, the expectation is for other major corporations to come to Times Square.

After Sept. 11, a number of retailers held back on expansion plans, and others have been preoccupied with the holiday season. Although this has translated somewhat into decreased demand, it is expected to be only a short-term decrease and should not equate to sizable rent adjustments. The rationale behind this thinking is that the hours of retail operations coupled with the quantity of people within the immediate vicinity, by definition should produce substantial rents for owners. Further-more, the redevelopment of Times Square/42nd Street, has brought many relatively recent long-term and well-known tenants to this area. Examples include Toys R' Us, Madame Taussauds, the World Wrestling Federation (WWF) McDonalds, Sephora, and ABC, among others.

Accordingly, there are few key spaces that will be available over the next several years. One of these spaces was initially planned as a Disney store at the southwest corner of 42nd Street and 7th Avenue at Five Times Square. This highly visible corner space is part of the newly developed project by Boston Properties and could house a retail/corporate tenant requiring as much as 35,000 SF on two levels. Additional signage immediately above the corner is also available and, given the fact that the space is on a downtown corner for vehicular traffic, significant additional exposure and advertising value is attributable to the space.

As with any event or cycle, there are highs and lows and the same will be true for Times Square. However, the unusual convergence of so many people, each day, seven days a week, should cause the values in Times Square to continue to increase over time.

COPYRIGHT 2001 Hagedorn Publication
COPYRIGHT 2002 Gale Group