Even SoHo Can’t Escape The Retail Property Storm
The retail slump that has been battering shopping malls across middle America is starting to show up in some of New York City’s choicest retail neighborhoods. The ground floor retail space at 93 Mercer St. in Manhattan’s SoHo neighborhood was in contract in August 2015 to sell for $35 million. But the sale ran into problems and in January 2017 the seller put the property back on the market. In November, it went into contract with a different buyer, this time for just $18.25 million. The upshot: the value of at least one prime retail real-estate property in SoHo is on its way to being cut nearly in half in two years’ time. “The steady drumbeat of negative retail news is affecting even healthy assets in markets with great sales,” said Jim Costello, senior vice president at Real Capital Analytics. For the past 18 months, the retail real-estate industry has been slammed by retailer bankruptcies and store closures. Malls anchored by department stores, in particular, have been most vulnerable to vacancies and declining rents and operating income, and some have lost 80% or more of their value. Vista Ridge Mall in Lewisville, Texas, for instance, sold for $18.1 million last year after its value slipped from $46.1 million a year earlier. Manhattan, a retail juggernaut, hasn’t escaped the market headwinds. After reaching a record in 2014, retail rents in Manhattan started sliding and then plunged 18% in 2017, according to data from real-estate consulting firm CBRE Group Inc. Read more at The Wall Street Journal.
