Century 21 is moving on up to the Upper West Side. The deep-discount clothing store, whose only Manhattan location near the World Trade Center is a must-stop for tourists, has announced that it will take over the spot vacated by Barnes & Noble opposite Lincoln Center. The space is massive -- more than 60,000 square feet.
WNYC's Soterios Johnson spoke with Stuart Elliot, editor in chief of the real estate magazine The Real Deal, about what the move says about shifting retail fortunes.
This is a pretty tony neighborhood. Have rents fallen so far that discounters are making a lot of inroads into once-upscale areas?
Elliot: You've definitely seen the stretch of Broadway and the Upper West Side go upscale in recent years. You've had the Apple store come in and Brooks Brothers and West Elm and Daniel Boulud opening a restaurant there. Rent has fallen a lot. They've fallen around 30 percent since the boom period. So it's definitely creating an opportunity for new retailers to come in. So obviously, that's a prime reason why this deal made sense for Century 21.
But didn't Barnes & Noble cite rising rents as one of the main reasons behind the closure?
Elliot: They signed their lease back in 2005. I don't have the lease terms, but during that market, rent was pretty high. So, if you're looking at the overall situation, they're facing higher rents than they were paying back then. The market has dropped in the last two years. But, overall, it's up since 2005.
I guess they couldn't renegotiate with their landlord. This is a little different direction for Century 21. They've been more on the periphery--Lower Manhattan, Rego Park, Bay Ridge, Paramus and Morristown. Do you think they will be a good fit for the Upper West Side?
Elliot: Yeah, I think it makes sense. It definitely bucks the trend that you've been seeing there. You have discount retailers like Loehmann's on Broadway and on 73rd. I think overall, there's different price points you're going to find on the Upper West Side. And obviously you're going to have a higher tourist draw in Lower Manhattan as well. I think discount retailers throughout the city are expanding. That's one of the main trends that's happening right now. You're seeing 99 cent stores spring up all over the place in the outer boroughs. In particular, you're seeing 99 cent pizza stores springing up in Midtown. People are looking for a bargain these days.
This was one of the larger Barnes & Noble stores that closed. Is this a casualty of the recession, or of more long-term trends? Do you think we'll see more Barnes & Noble closures?
Elliot: No, I think it's a casualty of the recession. I think the e-Book is playing a role in all of this. E-book sales tripled in the last year -- a similar thing you saw in the music industry with everything going digital. There's still a Barnes and Noble on 83rd and Broadway so, you know, 15 blocks away. So it's not like nothing is around anymore, even as far as Barnes and Noble. I think you could see more closures for sure. And I think it's interesting a lot of the places in Manhattan that you go to sit and fool around on your laptop and read a book. They've scaled back in recent years. You've seen Starbucks scale back their expansion. You've seen Barnes & Noble do the same. You've seen Virgin Megastore. So I think that's an interesting trend.