Photo: Five Below
Five Below, the discounter, recently announced plans to open its first store in Manhattan on Fifth Avenue between 44th and 45th streets near Bryant Park, and the landlord community isn’t all happy about it.
Many feel General Growth Properties only made the deal because of a rent squeeze across the city.
“It’s not a Fifth Avenue-type tenant. Everyone is pissed,” an unidentified broker told Commercial Observer, citing a location south of 42nd Street as more appropriate. The broker added, “There goes the neighborhood.”
Others felt Five Below’s arrival would have a moderate impact since the location isn’t opening up above 49th street where shoppers come upon Saks 5th Avenue and then Bergdorf Goodman, Tiffany and many designer flagships. Five Below will sit near flagships for Skechers, H&M, the NBA, North Face and Adidas as well as a Best Buy.
Discounters have also become more common in upscale shopping districts, and Five Below isn’t a 99-cents store. Playing up a fun environment like a traditional toy store, Five Below sells a wide range of novelty items, from toys to graphic t-shirts, nail polish and cell phone cases, for $5.00 or less. The chain should drive traffic and supports tenant diversity. The flagship is 10,800-square-feet compared to Five Below’s traditional 8,000-square-feet-size.
Still, a concern is that T.J. Maxx, Old Navy or other discounters may follow.
“Fifth Avenue will always be Fifth Avenue. I don’t think it’s going to become the epicenter of Joe’s Bargain Store,” added Timothy King, CEO of CPEX Real Estate, told Real Deal. “But having said that, there is a reality, and if I’m an owner with a vacant space, and a tenant comes along and pays a rent that I’m comfortable with, I’m not sure that I can afford the luxury of saying, ‘No, I can’t afford to put this sort of tenant there.’”
Retail broker Robin Abrams, a vice chairman at Eastern Consolidated, told Commercial Observer, “It will likely attract off-price or discount retailers to the corridor — tenants that focused in Herald Square or on 14th Street prior — although low price points don’t have to mean ‘schlocky’ and both locals as well as tourists will go there.”
- Don’t freak out (too much) about Five Below on Fifth, brokers say – The Real Deal
- GGP Signs Five-Dollar Store on Prime Fifth Avenue—Some Brokers Say, WTF? – Commercial Observer
- Five Below to open NYC flagship on 5th Avenue – Retail Dive
- Retail rents in Manhattan keep going down – The Real Deal
- Five Below to open flagship store on Fifth Avenue - CNBC