By William Sprouse
In a major retail change in Union Square, the Virgin Megastore could be departing One Union Square South in early 2009, according to sources. There’s still no word on who would be next to take the space. Winick Realty Group is handling the leasing assignment for landlord The Related Companies. However, no information was forthcoming from Winick.
Retail guru Faith Hope Consolo, chairman at Prudential Douglas Elliman, who said she worked on the deal, said Virgin were “pioneers.”
“The reason the early retailers took locations there: It was inexpensive, and there were opportunities for large spaces that did not exist in other neighborhoods,” Consolo said. “This coupled with the Greenmarket expanding, and the renovation of the park brought it all together.
“South corner, southbound street — you don’t get much better than that,” Consolo said. “It’s so hot,” she said of the Union Square area. “You’ve got a great cross-customer base. Of course, you’re blocks away from like 20 schools, graduate schools. You’ve got great demographics in that neighborhood. You’ve got a great quality of life.”
Jennifer Falk, executive director of the Union Square Partnership, called Virgin’s likely departure “bittersweet.”
“They were one of the first to take a chance and were a big part of the transformation,” she said. Falk said she was hoping the space would be leased to a high-end clothier. Pundits have thrown around H&M, Top Shop, Mango and Zara as tenants who might fit.
Consolo declined to give specific numbers, citing confidentiality agreements, but said retail rents for the 58,000-square-foot space facing the square ranged from $300 to $350 per square foot, with rents further from the park dropping to the $250 per square foot range. Rents in lower-quality spaces can be around $100 per square foot. Puma is said to be paying $300 per square foot at 33 Union Square West.
Consolo said the Union Square retail market was comparable to some second-tier markets in other cities, such as Sunset Plaza in Los Angeles; Back Bay in Boston; Collins Ave. in South Beach, Miami; and Chestnut and Walnut Sts. in Philadelphia. But she said it was probably most comparable to M St. in Washington’s Georgetown neighborhood.
However, Related Companies is not confirming that Virgin will vacate the space anytime soon. Related not only owns the building at One Union Square South but last year acquired the majority controlling interest of Virgin Megastores.
“No decision has been made yet about that store,” said Joanna Rose, a Related spokesperson, “and we are continuing to weigh all our options.”
Related is reportedly looking at several possibilities, ranging from keeping the current-sized store at the location, downsizing it or relocating it.
Asked whether the megastore would be leaving the square next year, a Virgin spokesperson said, “No information has been released as yet.”
