On Madison Avenue, It’s Year Two of Recovery
NEW YORK — There’s been movement on Madison Avenue, changing the pandemic-era optics.
For years, America’s longest luxury venue endured store vacancies caused by COVID-19, the ensuing flight to suburbia by residents, landlords demanding high rents, and businesses pulled crosstown or downtown by the lure of heavier pedestrian traffic on Fifth Avenue and SoHo.
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While on Madison Avenue, there are still too many vacancies — the rate stands at 13 percent — this year there has been a flurry of new store openings, relocations and expansions — a mix of galleries, restaurants and fashion additions — and even more upscale brands and businesses are on their way. It’s a continuation of trends seen since 2022, casting a sense of renewal along the avenue, particularly above 59th Street and in the 60s.
A handful of “anchor” locations, either recently opened or upcoming, are restoring, so to speak, the appeal of Madison, among them the Armani complex on Madison and 65th Street, the Sotheby’s headquarters on Madison and 75th Street, and a Valentino on Madison and 60th Street, as well as last year’s opening of the Hermès flagship on 63rd Street.
A total of 14 restaurants, stores and salons opened, relocated or expanded on Madison Avenue from January through July this year, including Caviar Kaspia at The Mark; Panerai; Stefano Pileggi’s Collezione New York; Lanvin; Anne Fontaine; Versace; Five Story, and the LGDR gallery.
On Tuesday, the Madison Avenue Business Improvement District, which covers the stretch from 57th to 86th Streets and portions of the streets on either side of the avenue, issued its 2023 first-half report. It cites 25 businesses under development on the avenue.
“The big points of interest for the future of the district is the sale of the former Whitney Museum of American Art to Sotheby’s for their global headquarters, which will be opening at 945 Madison Avenue. This really cements the neighborhood as one of the most significant places in the world to buy art,” said Matthew Bauer, president of the Madison Avenue BID.
“Years ago, galleries were taking upper floor space or side streets off Madison, and were replaced by fashion boutiques. Now you are seeing galleries coming back to ground floor establishments,” Bauer observed.
Another major change is the redevelopment of the Plaza Athénée, which has been closed since the pandemic and is being transformed into the Plaza Athénée Nobu Hotel & Spa New York, at 37 East 64th Street. It will include 145 guest rooms, a Japanese Onsen spa and wellness center. There’s also a total renovation underway at The Surrey, located at 20 East 76th Street, with a Casa Tua restaurant/club planned.
“We’ve also had a tremendous reinvestment on Madison Avenue by Richemont,” Bauer said, citing the Panerai expansion this year, A. Lange & Sohne relocating and expanding, Jaeger-LeCoultre doubling in size, IWC relocating and expanding, and Peter Millar also relocating, as well as last year’s Chloé opening.
In addition, “Bogner was a pop-up and decided to go permanent at 765 Madison,” opening later this year, Bauer said.
In an exclusive interview Monday, Bauer was asked when Madison Avenue started to recover. “We started to really see it in the second half of 2022. You could argue the recovery even happened earlier than that. But you really started to physically see it in that 2022 period, and that was punctuated in the biggest way by the opening of Hermès last fall. That was the tipping point” helping to bring back Madison Avenue’s reputation as a luxury fashion destination.
“It’s the local market, the people who live on or within a few blocks of Madison Avenue” helping to drive the recovery, Bauer suggested. All cities with dense populations, since COVID-19, “have a bit more of a footloose population, with people working from home, and having multiple places where to live…summer residences, but they always came back. When you look at the restaurants, who is outside dining there? It’s people from the neighborhood, people coming back out and re-engaging with each other. The loyalty of the local client here is something that has transcended changes in living patterns” as a consequence of the pandemic. “On the Upper East Side, the local clientele still wants to do their shopping there.”
Further fueling Madison’s recovery is what was a significant drop in commercial rents, encouraging businesses to take real estate, relocate, expand or even come back.
Strolling up and down the avenue, there are still darkened spaces, but there are also several storefronts indicating luxury brands on their way.
Regarding the 13 percent vacancy rate, Bauer commented, “Certainly there needs to be greater occupancy. But we [Madison Avenue] are consistent with many other locations within the city and in the luxury marketplace. We actually have some new space coming on the market,” Bauer added, citing The Benson building between 79th and 80th Streets, with three spaces, with one taken by Davide Cenci, and the Bellemont building on the southeast corner of Madison and 86th Street, with a couple of spaces for retail. Both are new mixed-used developments by the Naftali Group real estate firm.
“The overall tenor is that people are recognizing that now is a good time to reinvest” in the avenue. “We are below the peak of what rents were on Madison Avenue, and the spaces below 72nd Street are really starting to get filled out, as the Real Estate Board of New York reported,” Bauer said.
However, the former Barneys New York flagship site remains vacant since closing three years ago. Some sources have suggested it could be converted to residential space. While the dining — indoors and outdoors — has picked up, there’s a prevailing sense that Madison Avenue feels largely deserted at night. More nightlife would help business at the stores, and attract a greater percentage of younger adults.
“You are seeing more stores open till 7, and with places like Plaza Athénée, the Robin Birley private club opening [after transformations] they all going to be evening traffic generators, though Madison Avenue does have this character of being residential with people living above the storefronts… If you are asking what is the biggest need, it’s still additional restaurants. It’s still a piece of the puzzle,” Bauer said.
Jewelry brands are returning in the aftermath of some high-profile departures, among them Chopard, Hublot, and Cartier years ago.
One way the BID has been working to encourage more visitors to the avenue is by programming more events and activities. For example, in October there will be a festival in partnership with the Metropolitan Opera which will feature installations in stores, receptions to support the opera, and singers performing on Oct. 12, though the event will run through Oct. 22. There’s also an upcoming benefit for the Ronald McDonald House, by First Avenue and 73rd Street, for the second year in a row, two “gallery walks” during the year, and a Bastille Day celebration. BID organizes about eight events during the year.
Regarding luring a younger clientele, Bauer did say that increasingly stores are staging evening events, often revolving around charitable causes. The increased presence of hotels, new or being renovated, also adds their restaurants, bars and live music, enabling people to hang out into the evening, though compared to SoHo, Chelsea, the Lower East Side and Midtown, the energy isn’t as high.
According to data generated by Placer.ai, visitor traffic on Madison Avenue at the end of the first half of 2023 was nearly 9 percent higher than a year ago.
According to the Real Estate Board of New York in its spring 2023 Manhattan Retail Report, “Storefront availability along Madison Avenue has also tightened dramatically” and there’s been a “luxury leasing rally that started more than a year ago. Some of these stores opened only recently following extensive store buildouts…As anticipated, quality space options are scarce in many prime neighborhoods such as Broadway in SoHo, and Madison Avenue.”
The average asking rent per square foot on Madison Avenue is $834, an 8.5 percent increase year-over-year but a 9.8 decrease from fall 2022, according to REBNY. The highest rent exceeded $1,000 a square foot.
New businesses opened this year include:
Caviar Kaspia, a restaurant at 992 Madison Avenue in The Mark
Collezione New York, selling spirits at 786 Madison Avenue
Elyse Walker selling fashion and accessories, 926 Madison Avenue
Tokugawa, a Japanese restaurant, at 1022 Madison Avenue
Versace, at 747 Madison Avenue
Sunspel, a British fashion/accessory brand, at 781 Madison Avenue
Relocations and Expansions this year include:Ippolita, for jewelry, at 721 Madison Avenue
LGDR, a gallery at 19 East 64 Street
Panerai, the watch brand, 711 Madison Avenue
Warren-Tricomi Salon, 969 Madison Avenue
Aesop, for skin care, 1068 Madison Avenue
Anne Fontaine selling fashion and accessories, 723 Madison Avenue
Fivestory, selling fashion and accessories, at 855 Madison Avenue
Lanvin, 855 Madison Avenue
Businesses Soon To Arrive:
Casa Tua, a restaurant at 20 East 76 Street
Coogi, 766 Madison Avenue, for fashion & accessories
IWC, 645 Madison, selling watches
Myconian House, at 25 East 83rd Street, restaurant
Pat Saling Jewelry Collection, 28 East 72nd Street
Plaza Athénée Nobu Hotel & Spa, 37 East 64th Street
Sotheby’s, 945 Madison Avenue
Tanya Taylor, selling fashion and accessories, 980 Madison Avenue
White Cube, a gallery, 1002 Madison Avenue
Relocations and Expansion in Development:Diptyque: 971 Madison Avenue, home décor & fragrance
Frette: 806 Madison Avenue, linens & home décor
Fusalp: 713 Madison Avenue, fashion & accessories
Giorgio Armani: 760 Madison Avenue
Jaeger-LeCoultre: 701 Madison Avenue, watches
John Lobb: 698-700 Madison Avenue, shoes
Lalique: 21 East 63 Street, home décor
Michael Kors: 667 Madison Avenue
Officine Générale, 849 Madison Avenue, fashion & accessories
Paul Morelli: 725 Madison Avenue, jewelry
Peter Millar: 645 Madison Avenue, fashion & accessories
Robin Birley Dining Club, 850 Madison Avenue
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