Boston’s Newbury Street, a popular area for high-end shopping, has seen a growing number of vacancies in recent days.
It’s no secret that the upscale boutiques, restaurants and outdoor cafés along Newbury Street overshadow Downtown Crossing, the city’s original retail district. But some say the street’s image is tarnished.
After a grand opening of one of its few U.S. locations on Newbury two years ago, J.M. Weston, the French men’s shoe store where a wingtip costs $915, closed. Jessica McClintock, an apparel boutique that caters to brides was shuttered, and T.G.I. Friday’s, the place where customers lined Newbury for a chance to drink and dine, locked its doors nearly a year ago.
Today, two of three those spaces remain vacant and the bleeding may not be over. There are rumors swirling that other high-profile shops – such as Georgio Armani Emporium and The Gap – may close because sales are slipping, say commercial real estate experts.
“The loss of Friday’s was a no-brainer,” said Thomas Brennan, vice president of C. Talanian Realty Co., a retail commercial brokerage that owns properties on Newbury. “It was hip and different, but that was 20 years ago. At one time, Gap clothing was so hot movie stars were wearing it and everyone shopped there. It’s just not as cutting-edge as it used to be. Armani is not what it used to be. If you lose the curve, you’re gone. It’s a changing street and a changing world and you have to change with it because certain people always want to dress to the nines.”
For years, there have been quiet complaints that Newbury Street, like Harvard Square, has become homogenized with a collection of the same stores that mirror suburban malls. The announcement that Best Buy was taking over the former Virgin Records store at Newbury and Massachusetts Avenue brought more moans.
When Filenes’s Basement opened a 38,000-square-foot store at The Newbry, located at the former New England Life building, more sighs were heard. The Boston landmark will share the 10-story building with Borders, Guess and Victoria’s Secret at the block bounded by Berkeley, Boylston, Clarendon, and Newbury streets.
“Filene’s is not the best thing to happen to Newbury Street because it brings a less affluent consumer,” said Brennan. “I know the Newbry is full and doing well, but people who shop at Filene’s Basement will not drop $2,000 on a gown at Armani’s.”
Ironically, the Newbry’s Web site boasts its location “next to Louis of Boston” and “close proximity to first-class retailers” such as Chanel and Domain.
Wiggle Room
Located in the historic Back Bay neighborhood where the brownstone architecture is influenced by the Art Nouveau style of the 1920s, Newbury Street is still home to an assortment of upscale clothiers like fashion retailers Valentino USA and Juicy Couture.
Following a major renovation, Valentino leased the storefront that had been vacant for two years at Newbury and Berkeley streets. The 3,000-square-foot location cost $180 per square foot, easily the highest rent on the street, according to experts familiar with the deal.
Brokers say Newbury Street still commands the highest rents in the city, from a low of $67 per square foot to nearly $200 per square foot for street-level retail. Salons and other retailers willing to take an upstairs space can save money, but won’t have the same visibility and foot traffic.
Jason Weissman, principal and founder of Boston Realtors Advisors, said of the 368 stores on the street there are only seven vacancies – or a 1.9 percent vacancy rate. A recent walk down Newbury found a dozen signs offering space.
“I am not cheerleading when I say that there is tremendous demand for Newbury Street,” said Weissman. “Rents are flat, but the street is our core shopping district with a wonderful array of boutiques, unique retail and foot traffic. Retailers with the right product will do well here. Newbury is the quintessential retail street in Boston. It’s our Fifth Avenue.”
Robert Chacon, co-owner of Eclipse Salon/Gallery, said there is wiggle room on rent because sales among businesses on the street are down by as much as 20 percent over a few years ago.
“If you ask merchants how their business is doing they will tell you it’s off because of the struggling economy, high gas prices and out-of-control real estate taxes,” he said. “Shoppers and merchants have fewer dollars to spend.”
Chacon, who recently renegotiated his lease on the second floor of 164 Newbury St., said the landlord wanted $4,500 per month for the 1,100-square-foot space, or $49 per square foot – up from $42.50 per square foot. After a lengthy negotiation, Chacon secured the rent at about $36 per square foot. He said the deal is good for six months and then he will have to bargain again.
Still, Brennan insisted that the vacancy rate is among the lowest it’s been in years. He said that back in the 1980s and early 1990s when times were tough for retail, he had 40 spaces for rent. In the wake of 9/11, about 20 or so stores were vacant. Today, that number is less than a dozen, he said.
“Some merchants have told me that business is down, but others are saying the opposite,” he said. “Without question, Newbury is the most important street in the city. Everyone who comes to Boston wants to walk along it because they’ve heard of the quaint shops, art galleries, specialty stores, antique shops and jewelry stores.”
