Textiles targeted by NY buildings
December 3, 2001,
New York — It was barely two years ago that commercial real estate prices here were flush and many Midtown Manhattan leasing agents were wooing dot-com companies, prompting speculation that home textiles manufacturers and importers might get squeezed out of the market.
But times have changed, and many leasing agents for buildings along the 200 and 300 blocks of Fifth Avenue and the Bryant Park neighborhood on Sixth Avenue say they are taking strong measures to attract more home textiles companies as tenants.
Currently, 40 percent of the building — or about 250,000 square feet — is occupied by home textiles companies, including Dan River, Glenoit, Thomaston Mills, United Feather and Down, CMI Industries and others. But this year 1065 failed to acquire any new home textiles tenants, Crawford said.
That could be in part due to increased rent rates at the building — now $50 per square foot vs. $45 in January. But Crawford thinks a major reason could be due to "home textiles companies having had some financial difficulties this year."
1065 will continue to advertise and contract real estate brokers to help it find more home textiles tenants going forward, as it will work to retain its existing base of tenants.
"We're trying to get any type of home textiles company in the building that we can — big or small," Crawford said.
About 10 blocks south, the words "Textile Building" are fittingly emblazoned on the front of 295 Fifth Avenue, widely considered the hub of the home textiles industry.
"I only rent to the home textiles industry, and I'll keep a space vacant until a home textiles company comes along to fill it," said Claude Litton, president, Manhattan Properties Co., which owns 295 Fifth Ave.
With about 160 showrooms total, 295 is almost filled to capacity exclusively with home textiles tenants — with the exception of a bank and one other tenant that has occupied the building for more than 70 years.
This year, 295 gained seven new home textiles companies, including floor coverings manufacturers The Bacova Guild, American Mats, Capel Inc., Home Dynamix and Burlington Rug Corp.
"I used to have 10 to 12 rug showrooms," Litton said. "Now I have more than 30."
Litton's goal now is to convert the building exclusively into showrooms, allowing for more home textiles companies to be accommodated.
"I want to create smaller spaces, but pure showrooms," Litton said. "Buyers don't come to see studios and computer rooms."
Down the street at 261 Fifth Ave., the real estate strategy is quite different. Although the building made headlines in 2000 when its management announced it would raise rents by 10 percent to 15 percent and pursue dot-com tenants, 87 percent of the building remains occupied by home textiles tenants.
Now that the Internet bubble has burst, leasing agent Cushman & Wakefield said the building is "open to anything."
In fact, this year 261 —whose notable anchor tenants include Croscill and Richloom— has acquired six new home textiles tenants, including India Ink, Guilford Mills and National Curtain, and renewed several rent contracts.
The plan going forward is to cluster vendors by product category on a floor-by-floor basis, the company said. Also, the company recently lowered the rates back to the mid- to high $30s per square foot.
Harvey Richer, director of leasing for 230 Fifth Ave., said his building — traditionally a lamp and lighting industry showroom center — is now "getting an identification as a textiles business center."
With about 400,000 square feet total of space, about 40 percent of 230 is occupied by home textiles tenants like Cadillac Curtain, Kwitman and Panache. This year, the building added eight new tenants from the industry, including VTX, Phoenix International, Hillcrest, Famous Home Fashions, CGG, Perfect Pillow, Crystal Creations and Homestead.
In 2002, 230 expects to lease another 50,000 square feet of space to home textiles tenants. The building is already 96 percent filled to capacity. Rent rates are set at the low $30s per square foot, Rich said.
"As space becomes available we are actively pursuing more home textiles companies and hopefully keeping the industry concentrated here," he added. "With home textiles, we have a better chance to fill up the entire building. It's a better industry for us to go for. It has more available tenants with larger occupancy."
Added Elise Fishman, executive director, 230 Fifth Ave.: "Our goal for 2002 is to fill up as much of our empty space with home textiles to make our roster more inviting to buyers."
Nearby, 225 Fifth Ave., traditionally a gift building, has also recently "branched out into the home textiles area more than ever before," said Betty McIlveen, leasing agent.
Home textiles now occupies about 30 percent of the building. Rents going into 2002 "are stable," she said, with negotiations being made on an individual basis.
Another building that claims a decent share of the home textiles industry's showroom space is 1071 Sixth Ave., where 40 percent of occupancy belongs to home textiles companies, among them Bardwil Linens, Hollander Home Fashions, Biederlack of America, and building newcomer Pacific Coast Feather.
However, 1071 is not actively pursuing more home textiles tenants.
"We thought about being all about textiles, but there wasn't enough demand, so we went the direction of menswear, which makes up about 40 percent of the building," said David Levy, principal. "The other 20 percent is standard office space. Our goal is just to keep the building rented."
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