Jones Lang LaSalle
Garment district looks sharp with diversified tenant base
Zoning helps retain apparel, design firms
by Stan Luxenberg
Over the past 18 months, 1359 Broadway has been transformed, courtesy of a $54 million renovation. The building, which once housed dozens of clothing factories and had a 50% vacancy rate as recently as two years ago, now boasts 21 stories of office space--90% of which is occupied.
"We have been finding a new mix of tenants," says Brian Waterman, executive vice president of Newmark Knight Frank, the leasing agent for owner Marlboro Building Associates.
Surprisingly, that mix includes no fewer than 41 garment firms. Together, they rent 226,000 square feet--half of the total space at 1359 Broadway--largely for use as showrooms.
For years, people have expected that the garment district, which covers Fifth to Ninth avenues and West 35th to West 41st streets, would go the way of TriBeCa's butter-and-egg area or Madison Avenue's ad agency enclave.
In the early and mid-1990s, apparel businesses were squeezed by law firms moving south from Times Square, which was gentrifying. Late in the decade, dot-coms began relocating from the Flatiron district. Though some operations were pushed out, it is remarkable how much of the industry remains and how vibrant the area has become.
Still here
Special zoning rules partly explain the area's resiliency. In 1987, the Koch administration created a special preservation district as part of an effort to keep manufacturing jobs in the fashion center.
Under the rules, buildings on the avenues are free to seek any tenants, but properties on the side streets that had garment factory jobs must continue housing some manufacturing. After years of lax enforcement, the city recently tightened up.
But the district's strength primarily derives from the fact that fashion's biggest names--from Ralph Lauren and Kenneth Cole to Donna Karan and Liz Claiborne--are still based in Manhattan. As a result, the neighborhood remains the place where buyers from Federated Department Stores Inc. and others come to scope out what's happening.
Brokers report signs of new life throughout the area. Apparel showrooms are moving in along with offices of technology companies and those of nonprofit organizations. Vacancy rates in the Fashion Center Business Improvement District fell to 11.8% last year from 12.8% in 2004.
Brokers say rents in the mostly Class B and C buildings on the avenues typically run from $30 to $40 a square foot--an increase of more than 30% from three years ago.
Likes attract
Even the neighborhood's tonier buildings have garment tenants. The difference today is that instead of being packed with whirring sewing machines, spaces are filled with desks or sample racks.
In some cases, groups congregate in particular buildings. For example, 550 Seventh Ave. is known as a designer headquarters, while 555 Seventh Ave. has become a magnet for manufacturers of moderately priced clothing. Many swimwear specialists are at 501 Seventh Ave., a tower at the corner of West 37th Street. Tenants include Beach Patrol Inc. and Warnaco Group Inc., which owns Speedo.
"Businesses want to be in clusters so that out-of-town buyers can find everything they need in one area," says Scott Pudalov, executive vice president at CB Richard Ellis.
Overall, the garment industry in the area employs 25,384 people.
Clothing-related enterprises have recently been joined by other kinds of creative organizations. New arrivals include Abington Theatre Company and TriBeCa Potters, a studio, gallery and retailer. Unfortunately, many of those artsy people may not be getting enough to eat.
"There are a lot of fashion editors and models that have to go out of the neighborhood to find a chic restaurant," says Barbara Randall, executive director of the Fashion Center BID. "There is no destination restaurant."
Brokers say that, too, will change. With Times Square rebuilt, restaurateurs have been streaming south in search of more affordable space. "On the avenues, retail rents have jumped from $100 a square foot a few years ago to $200 or more," says Joshua Strauss, managing director of retail brokerage Robert K. Futterman & Associates.
Garment district looks sharp with diversified tenant base
Zoning helps retain apparel, design firms
by Stan Luxenberg
Over the past 18 months, 1359 Broadway has been transformed, courtesy of a $54 million renovation. The building, which once housed dozens of clothing factories and had a 50% vacancy rate as recently as two years ago, now boasts 21 stories of office space--90% of which is occupied.
"We have been finding a new mix of tenants," says Brian Waterman, executive vice president of Newmark Knight Frank, the leasing agent for owner Marlboro Building Associates.
Surprisingly, that mix includes no fewer than 41 garment firms. Together, they rent 226,000 square feet--half of the total space at 1359 Broadway--largely for use as showrooms.
For years, people have expected that the garment district, which covers Fifth to Ninth avenues and West 35th to West 41st streets, would go the way of TriBeCa's butter-and-egg area or Madison Avenue's ad agency enclave.
In the early and mid-1990s, apparel businesses were squeezed by law firms moving south from Times Square, which was gentrifying. Late in the decade, dot-coms began relocating from the Flatiron district. Though some operations were pushed out, it is remarkable how much of the industry remains and how vibrant the area has become.
Still here
Special zoning rules partly explain the area's resiliency. In 1987, the Koch administration created a special preservation district as part of an effort to keep manufacturing jobs in the fashion center.
Under the rules, buildings on the avenues are free to seek any tenants, but properties on the side streets that had garment factory jobs must continue housing some manufacturing. After years of lax enforcement, the city recently tightened up.
But the district's strength primarily derives from the fact that fashion's biggest names--from Ralph Lauren and Kenneth Cole to Donna Karan and Liz Claiborne--are still based in Manhattan. As a result, the neighborhood remains the place where buyers from Federated Department Stores Inc. and others come to scope out what's happening.
Brokers report signs of new life throughout the area. Apparel showrooms are moving in along with offices of technology companies and those of nonprofit organizations. Vacancy rates in the Fashion Center Business Improvement District fell to 11.8% last year from 12.8% in 2004.
Brokers say rents in the mostly Class B and C buildings on the avenues typically run from $30 to $40 a square foot--an increase of more than 30% from three years ago.
Likes attract
Even the neighborhood's tonier buildings have garment tenants. The difference today is that instead of being packed with whirring sewing machines, spaces are filled with desks or sample racks.
In some cases, groups congregate in particular buildings. For example, 550 Seventh Ave. is known as a designer headquarters, while 555 Seventh Ave. has become a magnet for manufacturers of moderately priced clothing. Many swimwear specialists are at 501 Seventh Ave., a tower at the corner of West 37th Street. Tenants include Beach Patrol Inc. and Warnaco Group Inc., which owns Speedo.
"Businesses want to be in clusters so that out-of-town buyers can find everything they need in one area," says Scott Pudalov, executive vice president at CB Richard Ellis.
Overall, the garment industry in the area employs 25,384 people.
Clothing-related enterprises have recently been joined by other kinds of creative organizations. New arrivals include Abington Theatre Company and TriBeCa Potters, a studio, gallery and retailer. Unfortunately, many of those artsy people may not be getting enough to eat.
"There are a lot of fashion editors and models that have to go out of the neighborhood to find a chic restaurant," says Barbara Randall, executive director of the Fashion Center BID. "There is no destination restaurant."
Brokers say that, too, will change. With Times Square rebuilt, restaurateurs have been streaming south in search of more affordable space. "On the avenues, retail rents have jumped from $100 a square foot a few years ago to $200 or more," says Joshua Strauss, managing director of retail brokerage Robert K. Futterman & Associates.
posted by Jones Lang LaSalle NJ News Blog at 8:53 AM
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