No, not the type of experience you are thinking about either. As rents in Times Square have fallen 18% in the past year from $2,500/sf to $2,104/sf, landlords are beginning to think out of the box about what type of tenants they need to attract. They believe the solution for this is “experiential retail” which includes restaurants, movie theaters, and exhibits. Times Square is known for its vibrant lights and exciting stores, but as more people decide to do their shopping online, landlords need tenants that are guaranteed to bring a constant stream of consumers. According to Alan Schmerzler, Cushman and Wakefield’s Vice Chairman of Real Estate Services, “It’s the surge in interest from this category (experiential retail) that is going to drive change in Times Square in the next few years”.
Kusher Companies, a multi-billion dollar real estate developer in New York City has recently signed leases at its retail condominium for spaces that include an 11,970 sq ft food hall, a 60,000 sq ft interactive exhibit from National Geographic called Encounter, and a near 50,000 sq ft miniature museum. Laurent Morali, the president of Kushner said, “what matters most is food and entertainment.” Operators of experiential establishments tend to generate far more sales than typical retailers and have an easier time paying $2,000+ per square foot.
However, landlords do not just want all of these amenities for tourists, as a growing number of offices and apartments pop up around Times Square. The people who populate these buildings also want food, entertainment, and affordable fashion. Nine or ten years ago only a handful of businesses catered towards locals, now there is a boom in businesses to support the area.