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National Chains Expected to Flood Meatpacking District as Rents Triple

By Andrea Swalec | April 17, 2013 7:00am

GREENWICH VILLAGE — Once known for cobblestone streets coated in "a thin film of meat sludge," and now home to Patagonia and Lululemon outlets, more chain stores may be on the way to the Meatpacking District, brokers said.

With an average asking rent of $183 per square foot in the Village and Meatpacking District in the first quarter of 2013 — up 11 percent from $165 at the beginning of 2012 — commercial rental costs could triple with the opening of the new Whitney Museum of American Art, according to an analysis by Massey Knakal Realty Services.

"Once the Whitney opens, retail rents could hit $500 to $600 per square foot," James P. Nelson, a partner at Massey Knakal, said at the briefing Tuesday on property trends in Greenwich Village, the West Village and the Meatpacking District.

"Besides restaurants and clubs, the big thing you're going to be looking at in the Meatpacking District are national retailers," he added.

This year, some Meatpacking District businesses are finding themselves priced out of the neighborhood as their 10-year leases expire, director of retail leasing Brendan Gotch said at the event, co-sponsored by the Greenwich Village-Chelsea Chamber of Commerce.

"A lot of the pioneers are being pushed out by the popularity they created," he said.

As a result, property owners have been able to net the higher rents they're seeking.

"[Landlords] are asking more and more, and the vacancy rate is staying low because people are taking [the properties] at those levels," Gotch said.

Gotch flagged several other areas where retailers and property holders can expect to see rising retail asking rents and falling vacancy rates. West Eighth Street between Fifth and Sixth avenues, Bleecker Street between Seventh Avenue South and Christopher Street, and University Place are all forecast to get more expensive for business owners.

Carmine Street, where the organic cafe Ellary's Greens recently opened, is another location to look out for, Gotch said. Massey Knakal has seen retail asking rents as high as $200 per square foot on the strip, which is nearly as high as landlords command on tourist-heavy Bleecker Street, Gotch said.

"I think we're going to see the continued transformation of Carmine Street, probably driven by high-end food," he said, adding he expects at least three storefronts there to go on the market this year.