Metro N.Y.C. Retail stays steady despite nationwide slowdown: Times Sq., East Side, Harlem lead growth

New York City's economy is slowing, but it's still the place to be if you're a retailer, or an owner of retail property. The latest Beige Book Report, a regularly released anecdotal report on the national economy prepared by the Federal Reserve, indicates that while certain U.S. markets may be struggling, the metro New York area still has a relatively healthy economy. Current conditions there should lead to continued strong retail performance, and accelerated leasing activity. Strong, but not stronger. Overall, the metro New York economy is weakening. Import volume at the Port of New York has slowed, and the manufacturing sector is reporting a slowdown. Overall, hiring activity has slowed as well. Tourism remains surprisingly healthy—no doubt thanks in part to the weak dollar—but the co-op and condo markets have slowed, probably on account of the recent home mortgage crisis and the consequently growing conservatism of lenders. Loan delinquency rates continue to rise, as credit standards tighten and demand slackens. Meanwhile, office vacancies are up slightly, and rent growth is decelerating. How do these conditions impact the retail sector? The good news is that retailers are reporting a moderate acceleration of business in March, following a lackluster February. Sales are particularly strong within the city limits, but on the whole no stronger than the same period of 2007. Prices are generally steady. Look for tourism to stay strong this year, with a concomitant uptick in retail sales. Hotel occupancy rose slightly this past winter—February's occupancy rate was three percentage points higher than February 2007—but room rates are down slightly. Broadway theaters are reporting that attendance rose by about 3% in both February and March, over those two months last year, but that revenues rose slightly less, since average ticket prices dropped slightly. These numbers appear to indicate that while consumer spending—by both residents and visitors—is not growing at full speed as it was in the middle of this decade, it's by no means in decline. The stronger retailers should continue to perform satisfactorily. The Manhattan retailing scene is just as vibrant and exciting as ever, and it'll stay that way for the rest of the year. There's not a weak neighborhood on the island, where retailing is concerned. Much of the focus currently is on Downtown, where the past few years have seen amazing retail growth in SoHo, TriBeCa, and the Financial District. Out-of-towners from all over tend to gravitate towards "The Crossroads of the World," Times Sq., which occupies the area bounded by 42nd and 47th St., Seventh Ave. and Broadway. The latest retailing news there is that American Eagle has landed in more than 40,000 s/f on four floors at 1551 Broadway. Nearby, Levi's will debut an enormous flagship store at 1501 Broadway. This continues a recent trend by manufacturers of all types to open enormous self-branded stores in Manhattan that serve both as landmarks for visitors, and to promote their products worldwide. Muji, a Japanese retailer, will open a flagship store in the new New York Times building at 620 Eighth Ave., and Dean & DeLuca will open its seventh Manhattan café there. Meanwhile, the old New York Times Building, at 229 West 43rd St., will be transformed into cafés (including The Cheesecake Factory) and apparel boutiques and re-christened The Times Sq. Building. Another neighborhood that's making news lately is the area around Bloomingdale's department store, in the East 60s. The area is currently dominated by big-box retailers, and, the former site of Express is being transformed into a multi-level Victoria's Secret, while True Religion is set to open on Third Ave.. Dylan's Candy Bar, long a local favorite, is adding a third level for private parties and expanding its main retailing area to include a full dessert café, ice cream bar, and a special feature called "candy couture." Bloomingdale's itself is making big news lately, opening a new Lancôme shop and a men's boutique, No. 59 Metro. Finally, Harlem has come back into its own. Recent residential development and retail expansion has brought chic storeowners, star chefs and curious shoppers to one of Manhattan's oldest neighborhoods—making it as upscale as it was in the 1760s, and as fashionable as it was in the 1930s! Designers, restaurateurs and hoteliers are looking for space in this neighborhood, and so are retailers like Levi's, J. Crew, Crewcuts, and Hollister. N, a trendy retailer that offers cutting-edge clothing, accessories, and home decor, is leading the revitalization of the neighborhood from its two-story boutique at 116th St. and Seventh Ave. Two new hotels are under construction in Harlem as well. Faith Hope Consolo is the chairman of the retail leasing and sales division at Prudential Douglas Elliman, New York, N.Y.