On an island that’s 99% developed, where can you go but up? The answer is obvious: Down. With space become ever tighter and more costly in Manhattan, the idea of using so-called “lower-level” space is catching on in a big way.
Underground shops have existed in New York since the 1930’s, when Rockefeller Center opened with more than 200,000 square feet of below ground retail space. Subway stations have long included shops that cater to commuters, such as fast food spots, drug stores, and the like. These allow passengers to take care of errands right in the station, and continue to be popular, with new development underway. For example, Columbus Development is engaged in a project for the Metropolitan Transportation Authority in the Columbus Circle subway station, developing a retail space called Turnstyle that will include 34 high-end stores and restaurants. This is intended to become a destination rather than just a stop on the subway –although with 90,000 passengers passing through the station daily, there is considerable built-in traffic.
This is interesting, but the phenomenon we’re talking about here is a new wrinkle for underground retail in the city. There’s a trend underway that involves pouring hundreds of millions of dollars into previously underutilized basement spaces. Manhattan’s towers and office buildings often sit on multiple floors of underground space, once used only for storage. As document storage goes digital, there is no longer the need there once was for file storage, and building owners are finding ways to generate income from space that is basically sitting empty.
This makes all kinds of sense, and a variety of retailers are happy to occupy these basement digs, which typically rent for between $75 and $125 per square foot. Considering that retail space above ground can easily be priced from $1000 up, we can understand their interest.
The underground spaces are attracting a spectrum of retail operations. Grocery stores find them ideal, since their heavy refrigeration equipment makes it impractical to locate on a 2nd floor or higher. Their low profit margins and relatively inflexible prices make it difficult for this sort of business to afford space in Manhattan, but below ground space fits their budget.
In the past year or so, high-end retailers have gotten into the act, with major projects underway below the city. Retailers find that customers don’t mind descending to the basement if there’s something worth finding there, and they’re creating stunning spaces to welcome them. Big names like Apple and Target already have lower level locations in the city.
An example can be found at the former home of Chase Bank at 28 Liberty St. A Chinese investor purchased this building, previously named One Chase Manhattan Plaza, in 2013. It has 5 floors below ground, and they are being developed as upscale retail space, with an estimated opening in late 2017.
Imaginative ideas are evident in these underground projects. On the Lower East Side, the developers of Essex Crossing plan to tunnel under Norfolk and Suffolk streets and create a 700-foot long pedestrian concourse. This will be lined with a mix of retail and dining, and lit by a 40-foot tall glass wall at the surface.
Nearby, an unused trolley car storage facility is being eyed as the site of a basement-level park, to be called “Lowline.” Sound like sci-fi? Nope, just another day in Manhattan.