Harlem retail is bustling once again. Investors are taking notice and buying up the remaining storefronts which are still occupied by legacy tenants. These mom and pop stores have been taken over by such national tenants as American Apparel, Duane Reade, Foot Locker, Mac Cosmetics, Marshalls, Old Navy, Staples, and Starbucks.
One recent sale which benefited from this activity was 64-68 West 125th Street, located between Lenox and Fifth Avenues. Our firm sold the property in an all cash transaction valued at $7,100,000 or approximately $938 per square foot.
The single story property is 75 feet wide with approximately 7,569 square feet. There are three retail units with short terms leases at substantially below market rents in the $40/SF range. The mid blocks on 125th Street command rents upwards of $100/SF.
“With the leases set to expire in a few months and the huge amount of air rights, this property was extremely attractive,” said Massey Knakal First Vice President of Sales Jeffrey A. Shalom who exclusively handled this transaction with Director of Sales Lev Kimyagarov. “There was strong interest from several local owners, as well as many other retail investors and developers. Within weeks of marketing this property, we received an aggressive offer from a local owner who was able to close within a few days after signing the contract,” added Shalom.
This sale will benefit from its proximity to other large scale projects in the works. At 125th Street and Park Avenue, the NYCEDC recently selected Janus Partners LLC and Monadnock Construction, Inc. to redevelop the former Taystee Bakery complex into CREATE @ Harlem Green. According to Harlemworldblog, it will provide an additional 328,000 square feet of commercial and industrial space to house a number of tenants from creative industries. Harlem Brewing Company, which currently brews in Saratoga Springs, will also be moving its production facility there.
NYCEDC also selected 125th Street Equities LLC to redevelop the Corn Exchange Building, rehabilitate its landmarked base and add six additional floors for office and retail use.
According to the New York Times, The Victoria Theater on 125th Street, between Seventh Avenue and Fredrick Douglas Blvd, will also be converted by Danforth Development Partners and Exact Capital. This $100 million project will break ground in the second half of next year. While not completed, the current design, by Aufgang & Subotovsky Architecture and Planning, calls for two towers to rise above the theater: a 140-unit rental building and a separate 175-room hotel. The base will consist of the historic building, built in 1917 to a design by Thomas W. Lamb, and will become the new home of the Classical Theater of Harlem, Jazzmobile, the Harlem Arts Alliance and the Apollo Theater Foundation.
“All the major hotel chains have expressed very serious interest in the project — even Starwood, which opened an Aloft hotel on Eighth Avenue but is considering another Starwood brand there,” said Curtis L. Archer, the president of the Harlem Community Development Corporation.
The Times article went on to say that other projects planned for 125th Street include Mart 125, across the street from the Victoria Theater. The mixed-use project will create up to 67,000 square feet of cultural and commercial space. It will also be home to the National Jazz Museum in Harlem, which produces jazz events and education series, and ImageNation Sol Cinema, which runs an independent film festival.
A fifth project is the East Harlem Media, Entertainment and Cultural Center. A $700 million endeavor, it is planned to eventually include a hotel, 250,000 square feet of office space and more than 800 units. A consortium of developers including Archstone, GGP, and the Richmond Group will help make this a reality.
With all this new development on 125th Street, the street will be hardly recognizable in the years to come. Only old standbys such as the Apollo Theater will serve as reminders of what is there today.