Seen & Heard: Three Store Closings at the World Trade Center Mall

••• Good news: Doughnut Plant is opening in the World Trade Center mall, according to the store directory. It’s on the top level, where the Italian food store Pulia was supposed to go. And another retailer you might know from Soho is coming to the Oculus, but that’s embargoed till next week.

••• Bad news: Three stores have closed. The Penhaligon’s store directly below Doughnut Plant; Links of London; and Folli Follie jewelry store. Hope that guys gets out.

••• There were staffers inside the Dig Inn on Greenwich yesterday, so maybe it’s finally getting ready to open.

••• The new seven-story, single-family home at 512 Greenwich has been fully unveiled. Winka Dubbeldam is the architect.

••• “Billions” is back in the Hudson/Vestry area today.

 

11 Comments

  1. It’s surprising (to my real estate naivete) why it’s so difficult to sustain a business in the WTC mall. Are the rents impossible? Not enough foot traffic in certain corridors?

    Doughnut Plant – yes!
    Now I’m also hoping for Dun-Well Doughnuts to open a spot near us.

    • It’s retail in general. Let’s say your rent was only $1000/mo. You need a minimum of 2 people, running very long shifts 7 days a week in order to cover that reasonably. You need to sell enough product to cover the $1000 + payroll every month. Then you need insurance. And you don’t get the goods for free, so you’re paying for the inventory you floor. Subtract shrink (theft), the need for probably additional help during busy holiday periods, you will probably need the equivalent of 1 additional person during those times.

      Now increase that rent to 5x, 10x, 25x. At those numbers (and I’m guessing – I have no idea what WTC rent is), it makes a pretty bold assumption that there’s enough people that are willing to buy stuff all the time to make it cover expenses. How much jewelry can you realistically sell? You’ll sell a lot during V-day and around the holidays, but then it’s probably on a trickle of sales in-between.

      It’s tough but the economics of mall retail haven’t made sense in a while, esp. in the online economy. You have to sell a lot of product to just sustain… for you to be able to make more money year over year is pretty rare unless you’re a majorly hyped of-the-moment brand (e.g. Apple, etc.)

      • Thank you for this. So perhaps it’s the same brutal economic reality that’s leading to so many empty storefronts in TriBeCa, SoHo, etc. Or is it something particularly difficult about keeping a business going in the WTC?

        • You’re thinking about it the right way. Although empty storefronts are also a result of landlords waiting for windfall tenants willing to pay 10x rents over prior tenants, or waiting for some developer who’s going to come in and buy a block of empty property as a package.

          If I was charging 12k a year in rent, and think someone will pay 48k a year in rent down the road, I as a landlord would probably just raise the rent, and force the tenant to leave. Further, I would not be in a rush to fill that spot for a couple years, betting that my 48k a year tenant will come.

          Obviously it’s a dirty game. Part of the problem is the city doesn’t penalize landlords for empty storefronts and the negative economic impact it brings to a neighborhood so only the residents get hurt here, while landlords wait for the right tenant and payday.

  2. Curious where this news about Doughnut Plant comes from because it’s not on the WTC Westfield website, not on the Doughnut Plant site. When asked at the Oculus about it, no one who worked at the info office knew.

    What’s the source here?

    Thanks.

  3. Alee,
    You are incorrect. Landlords just don’t arbitralily raise their rents to obscene levels. Nor is there a benefit to keep stores vacant for four years. Rental missed is never recouped.
    Tell us, when did you shop in WTC last to support the retailers, and what did you buy?
    Support local vendors.

    • This is unnecessarily accusatory. What does Alee’s shopping history have to do with the explanation of retail economics that was provided? Get a life, Craig.

    • Overly simplistic, but…

      (1k/mo) 12k per year x 5 years = 60k
      (4k/mo) 48k per year x 5 years = 240k

      After the lease at 1k/mo is over, I could raise the rent, leave my property vacant and just pay whatever taxes and fees I needed to, waiting for my 4k/mo tenant. In this example, I could leave it vacant for 5 years (forgoing 60k of income) for that 4k/mo tenant where I still come ahead 18 mo into the lease vs. if I had just continued the existing tenant. Technically you could let it go empty for 10 yrs and still make a profit.

      For the record I’m not a landlord. And I shop local.

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