Fashion tenants in the Fashion Center are back in style.

The commercial real estate market in the neighborhood has been very active for the first half of 2004, due to newcomers to the area, expansions, and numerous renewals. Of this new business, the percentage of office tenants to fashion tenants is leveling out for the first time since 9/11.

Post-9/11, the fashion industry saw a period of downsizing that affected the Fashion Center commercial real estate market. Small companies either went out of business or were acquired by larger companies. Many tenants would double (or triple) up, and in some instances, six leases were condensed to one. But this trend is reversing. For example, in the Children’s Wear Building, 112 West 34th Street, many big-player tenants who had moved out to save money are now moving back in.

The Fashion Center will always attract fashion tenants for a number of reasons. First, fashion companies like to “stick together.” They see the neighborhood as the epicenter of not only fashion in the city, but also of fashion in the country–or even the world. Rents in the neighborhood remain fair. Space in the area is often ideal for the tenants–commercial loft space with high ceilings, open plans, natural light and versatility.

The final reason is economic in nature; competition is good for business. Being in one area makes things easier for buyers and keeps the customer base together for tenants.
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In this market, it is important to position buildings properly. If one considers what is good for tenants’ business when doing this, the tenants will often follow.

Helmsley-Spear Inc., for instance, has recently renamed 1400 Broadway from the Better Dress Building to the Contemporary Apparel Building.

As modern women veered away from dresses towards trousers and skirts, the older name was no longer appropriate.

The Contemporary Apparel Building gives a more modern message to both prospective tenants and their clients.

Although the area has recently seen more office tenants, these “fashion-related offices,” such as accountants or lawyers, are businesses that typically specialize in the industry.

The advantage of the area for these tenants again has to do with geography. It is simply more convenient to be in the same neighborhood as the clients you are servicing. Having these companies in the neighborhood is also beneficial to the fashion industry as a whole, as fashion tenants do hot have to look elsewhere for these services.

Helmsley-Spear Inc. is maintaining the renewed strength of the Fashion Center through several initiatives. First, we are custom-building showrooms and offices with substantial work-letters.

With 2.8 million square feet of rental space currently, we are also looking to acquire management of more properties. We continue to develop new programs to effectively position buildings that may have, in the past, had lower occupancies.

To generate these fresh ideas, we have added to our sales and leasing team by hiring and promoting people with years of experience at various buildings who tan bring their own creative approaches to the table.

Helmsley-Spear Inc. is looking forward to the second half of 2004 and plans on remaining a key force in the Fashion Center.

As fashion tenants flourish in the area, we look forward to providing them, and the service industries that are following them, with top-class space. After all, great commercial real estate never goes out of fashion.