the future of Canal Street
This stretch of land, which takes its name from the little canal that was part of the city landscape between 1811 and 1819 intersecting Manhattan from east to west at this site, is about to undergo a process of change and gentrification.
At this time Canal is still mostly a chaotic aggregate of souvenirs, fake bags and cheap technology shops. To be noted though is the fact that the landlords who own the buildings where these stores are located are not getting a bad rent income at all. It is often times comparable to some higher end areas in SoHo (about $300 to $400 a square foot) since landlords on Canal can request a higher premium from riskier month-to-month businesses that deal mostly with cash transactions.
Many real estate players are convinced of the commercial potential of this stretch of Canal, particularly from West Broadway to Centre Street. They say it can do better.
The majority of the buildings fronting Canal are owned by several different owners. To be exact 72 buildings belong to 40 different owners. Consequentially the change will be less organic than, for example, another area controlled by a handful of developers acting in cooperation.
The acquisition of a relatively small building (“only” $8.2 million) by a giant like Vornado Realty Trust, underlines how much of a key neighborhood this is becoming.
For some time the change on Canal is manifesting itself specifically in the number of buildings that are switching hands and the presence of “for rent” signs on former low-end shop sites. Many are eager to see more national chains open up here.
One important factor that is pushing this positive evolution is the City of New York’s involvement in the crackdown of illegal businesses (like the sale of fake handbags and watches) which began to take force in 2008/2009.
Some international luxury brands are already present, like the Sheraton at 370 Canal Street.
If there are some skeptics on the future of a Canal welcoming higher end retailers, on the other end the majority seems to agree that this trend will continue and bare its fruits. We shall only find out when this will happen.
We are available to answer your questions on New York City Real Estate. We will be pleased to hear from you.