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The Faith Consolo Team

Faith Hope Consolo
Licensed Associate Real Estate Broker

575 Madison Ave
New York, NY 10022
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In the News

East 86th Street, Bustling Transit Hub, Gets a Makeover

The transformation along the East 86th Street corridor is proof to residents that change is possible in every New York City neighborhood, even on the Upper East Side.

For decades, East 86th Street, a bustling, unpretentious, commercial thoroughfare, was an aberration on the Upper East Side, known more for its doorman coops, tree-lined side streets, highend specialty stores, and salons. Now two new luxury condominium developments rising on East 86th Street are catalyzing a sea change that promises to bring more attractive and upscale national retailers to the strip, New York brokers say.

As 86th Street awaits the opening next year of Extell Development Corporation's Lucida, near Lexington Avenue, and the Related Companies' Brompton tower, retail rents along the corridor are soaring. Some retail spaces are commanding up to $400 a square foot, roughly double their levels of about a year ago.

The Lucida, an 18-story, glass-exterior building, will house 110 condominiums and lays claim to being the first building on the Upper East Side to register for certification as a "green building." Apartment prices start at just under $2 million.

A block east of the Lucida, along Third Avenue, the 22-story, 206-unit Brompton, which runs from 85th Street to 86th Street, is slated to open to tenants in the fall of 2008. With amenities such as a children's playroom and television lounge, the red-brick and limestone building is targeting the family set for many of its units, which are also expected to have multimillion-dollar price tags.

These two luxury residential projects and their retail anchors will make the East 86th Street strip — already home to a Banana Republic, a Victoria's Secret, and several electronics chains — attractive to more brand-name apparel stores, brokers said. They said brand name stores such as J. Crew, Ann Taylor, Coach, and Zara could supplant smaller tenants on the block.

The chairman of the retail leasing division of Prudential Douglas Elliman, Faith Consolo, said retail asking prices along East 86th Street have soared from their 2006 levels, when would-be tenants could rent space for about $150 a square foot. "It's desirable, it's sophisticated, but it's not alienating because it's not luxury, luxury, and it's not deep discount," she said. "Whether you want to spend $5, $50, or $500, there's something for you now."

Ms. Consolo said the new developments would solidify the corridor as a vibrant shopping hub, not unlike those flourishing on 14th Street and 34th Street. East 86th Street also has the added appeal of being nestled on the Upper East Side, a neighborhood attractive to young families because of its bevy of hospitals, top-tier private schools, proximity to Central Park and public transportation, and safe reputation.

Retail prices at the base of the new developments are around $350 a square foot, an executive vice president of the Lansco Corporation, Robin Abram, said. The Lucida boasts about 100,000 square feet of retail space, which will be filled by a Sephora, H&M, Barnes & Noble, and Bank of America. The Brompton, meanwhile, has about 10,000 of yet-tobe-leased retail space.

Ms. Abram said the Brompton's retail space is probably not big enough for a Whole Foods Market, but that the grocer has been seeking a space along the thoroughfare.

"The rents will continue to be aggressive," she said. "The nationals will continue to come in — for better or for worse — and they're going to displace some of the local tenants, who find it harder and harder to maintain spaces there."

A doughnut store, a pet shop, and a 24-hour diner were among the stores closed to make way for the glossy new developments.

Added a retail broker with Ripco Real Estate, Andrew Mandell: "As leases expire, the spaces will be filled with more upscale tenants."

"You may see more fashion apparel," he said. "It's becoming a place where residents from Fifth Avenue to York Avenue go to shop."

A vice chairman at the Related Companies, David Wine, said his organization has been interested in the area "because 86th Street has tremendous transportation advantages. It's always been the standout."

Mr. Wine described the street's longtime retail character as "disjointed." But with the sizable retail spaces in the two new developments, he predicts that character will soon become more cohesive. "It was kind of hodgepodge, and now you'll have kind of more substantial residential properties with the retail below," he said.

A senior director for the retail group at Cushman & Wakefield, Joanne Podell, credited the developments by Extell and Related as keystones in a broader upturn in retail activity on 86th Street. The retail character was one filled with "small shops and not really kept up. You now have a clean new fresh landscape," she said.

As retail rents go up and the demographic of the neighborhood becomes one with more affluent families, Ms. Podell said shops are changing to become more upscale and family oriented. "The retail brokers are very much savvy about what's going on in that market and recommending to their clients to take a look," she said.

 

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