What a difference a few months make.
Last winter, "For Lease" signs seemed to pervade Newbury Street. Now, the vitality coursing through its retail real estate market is once again proving that the eight-block shopping mecca has staying power. Generating the activity are about two dozen tenants and investors who have recently signed leases or purchased buildings. Last February, about 11 percent of the 400,000 square feet of retail space was available to lease, including a prominent 10,000-square-foot building at 275 Newbury St.
Now, the vacancy rate is down to about 6 percent, with asking rents from $60 to $125 per square foot annually.
"It's one of the best leasing years we've seen since the late 1990s," said Douglas Marr, a senior vice president at Keliher Real Estate Inc. After a lackluster 2003, almost half of the available space was gobbled up in the past few months, with about 20 leases signed by retailers opening businesses, or retaining or expanding existing ones.
"People are snapping up spaces that had been languishing," said Susan Lanoue, who on June 16 leased 2,000 square feet at 160 Newbury St. for an art gallery, Lanoue Fine Art. "There's a lot of buzz and optimism out there."
At the same time, five buildings on this Victorian-era promenade, which is packed with eateries and clothing, jewelry, art, and furniture stores, have recently sold as prices rise.
"After looking for a long time, I finally have something with a big enough footprint to create the kind of spa I've dreamed of," said Joyce Hampers, who last month closed on the four-story building at 275 Newbury St. "I think it's a rare find."
Investors like Hampers are motivated by low interest rates, solid consumer confidence, and an increase in travelers, said Thomas Brennan, vice president of C. Talanian Real Estate Inc. Eighteen months ago, Talanian purchased 275 Newbury for about $4 million with the intention of leasing it. But on June 18, Hampers, who rents space at 338 Newbury St. for Giuliano, a spa she owns, closed on the building, paying about $5 million. This week, she signed a contract for a 12-month, $2 million interior/exterior renovation.
By next summer, she plans to open Emerge , a spa for women and for men, who will each have their own floor.
"Newbury is where it's at for retail," she said. "We've done very well at Giuliano and by opening a second location a few blocks down, we'll capture a different customer base."
Susan Lanoue also believes that her first business venture set to open in September will flourish on Newbury Street, where for 16 years she has managed other art galleries. She decided to replace the "For Lease" sign in front of the building with a "Coming Soon" sign only after doing extensive market research on other possible locations: big cities like New York, Washington, D.C., and San Francisco, and small affluent communities such as Naples, Fla., and Greenwich, Conn.
"Boston is big and affluent enough so that it will supply about half of our customers," she said. "But it's small enough so that everyone who visits the city comes to Newbury Street. This is where a high-end gallery needs to be."
Attesting to the street's retail vibrancy is 26-year-old Sarah Johnson. In May she opened her first business at 286 Newbury St., the handbag and accessory store called Luna Boston.
"With almost no ads, foot traffic is sustaining the level of business we need," she said. But, not leaving anything to chance, she added: "Soon, we'll be launching a website for online sales."
Published: July 17 2004
