The other shoe finally dropped in the turbulent retail property sector and it was a Jimmy Choo pump.

With so many venerable anchor retailers in full retreat, causing panic among owners of regional malls, rents for posh space in Manhattan, Washington, D.C., and San Francisco, for example, and tony enclaves like Palm Beach and Beverly Hills have remained stubbornly high despite sagging sales of luxury goods.

It isn’t the economy, which has posted seven years of steady growth. Second-quarter GDP checked in at 2.6 percent.  Consumer confidence recently hit a 15-year high, but a report from the Luxury Institute said U.S. earners making more than $150,000 a year would spend 20 percent less this year.

In our discussions with executives at all the top luxury brands we’re hearing no interest in expanding or relocating.  This will add to stress on landlords with empty space valued at the top of the market – space that until this year largely has escaped the steep value corrections that have roiled the overbuilt retail property category for years.

Last month, The Wall Street Journal reported that top executives at the nation’s largest mall owners, Simon Property Group Inc., GGP Inc. and Macerich Co., all REITS, were seeing smaller paychecks because their compensation is tied to stock prices.  The 18-month slide in REIT shares shows when the pain began spreading to high-quality retail property.

Meanwhile, every successful merchant is pouring more resources into creating customer-satisfying experiences aimed at attracting new and repeat patrons: a video game room and other activities for families by mass merchandisers or more wine and coffee bars in shops selling high-end personal goods.

Salvation for many landlords may be with the potential for growth of the Amazon stores. Fortune magazine recently observed that while many strictly e-commerce companies have had mixed results in the brick-and-mortar environment, Amazon’s enormous resources make it an outlier.  For landlords, Amazon is the vision of a gold-plated, long-term tenant.

The company started with Amazon Pop-Up stores in 2015 and now has 38 locations in 17 states.  Next the company opened bookstores in Chicago and seven cities on the east and west coasts.  Four more Amazon Books locations are planned in California and a second location in Manhattan.

And then there’s the convenience market, Amazon Go.  The few opened so far are helping Amazon test various innovations beginning with the boast that it’s “a new kind of store with no checkout required.” Simply use the free Amazon app to enter Amazon’s roughly 1,800-foot stores and “leave with the products you want.”  Stores will have from three to 10 employees.  Fruits and vegetables will be delivered via Amazon Fresh, say other reports, adding that the e-commerce giant is testing the idea with electronic and furniture stores.

Retailers and property owners nationwide have their eyes on Amazon’s evolving retail schemes as well as new merchandising ideas shown by others such as Samsung and Tesla that could create a magnet tenant and a boon to adjacent commercial space.

But here in Manhattan, in the short term there’s a huge vacancy overhang and the difference between asking and effective rents has grown to 20 points.

In the prime Soho submarket, for example, there are 100 buildings on both sides of Broadway for five blocks between Canal and Houston streets. Ground-floor retail space in 40 of those buildings is available.  If you add in the other streets in Soho, the total reaches 140 available spaces.

We have a client with about 14,000 square feet of space on Broadway.  Fortunately, for him, there’s little debt on the building.  Every other landlord in that submarket is asking $700 to $800 per square foot annually.  To get this space leased quickly, it will be offered at $600 and signed to an effective rate of $500 to $550 per square foot.

As for what’s on the horizon, soon we’ll be learning how shoppers’ habits adapt to self-driving cars and trucks, employee-less stores and other changes no one can predict with accuracy except that progress will come.

Greg Tannor has 17 years of experience in commercial real estate, specializing in retail leasing investment sales and office leasing.

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