The Garment District in Midtown Manhattan is famous for being one of the biggest centers for fashion manufacturing and design in the world. Always at the forefront of the global fashion industry, New York City has historically housed numerous warehouses, manufacturing facilities, showrooms and boutiques, most of them concentrated in the Garment District. However, the area known by many as the Fashion District started to shrink as the fashion manufacturing industry declined, eventually ending up comprising the small Midtown section bordered by Fifth and Ninth Avenues and 34th and 42nd Streets.
Besides incorporating architectural attractions like the Greenwich Savings Bank Building at 1352-1362 Broadway, the less-than-a-square-mile Garment District is adjacent to the Penn Station area of Midtown, which houses the busiest intercity railroad station in the Western Hemisphere. The entire Penn Station/Garment District area is highly appealing to commercial real estate investors, being in close proximity to Grand Central Station, Times Square, and Bryant Park, and offering easy access to the state-of-the-art office towers of Hudson Yards.
The spacious warehouses that were once occupied by fashion brands for their manufacturing needs are now attracting businesses looking for quality, light-filled, loft-style office and showroom space. Many organizations are trying to further fuel investor interest in the area, including the Garment District Alliance, a nonprofit business improvement district that promotes the area as a strategic investment destination for both fashion and non-fashion companies.
Among the businesses that call the Penn Station/Garment District home are global fashion brands Carolina Herrera, Donna Karan, Oscar de la Renta and Calvin Klein, further consolidating the area’s reputation as a fashion Mecca. Yet businesses across all kinds of industries occupy office space in the district, including Sag Harbor, Byer California and DreamWorks at 1407 Broadway, and Cisco and Citigroup at One Penn Plaza.
Development at Related Companies’ nearby Hudson Yards and the convenient location in close proximity to all the major interest points in Midtown pushed the Garment District availability rate to 6.2% in Q1 2019, the lowest rate in all of Manhattan, per CBRE data. This was the result of intense leasing activity in the district during the quarter, with more than 465,000 square feet of office space leased. What’s interesting to note is that the availability rate experienced a significant decline even with massive new office supply coming online in Hudson Yards.
Average office asking rents in Penn Station/Garment District rose well above the Midtown Manhattan average, reaching $98.10 per square foot at the end of March 2019. The steep prices do not defer investors, and the area is highly appealing to companies in industries like media, advertising and PR, architecture, software, and big pharma. Earlier in 2019, Pfizer signed a 800,000-square-foot office lease at Tishman Speyer’s new Spiral development at 66 Hudson Boulevard, in one of the biggest lease deals of Q1.
Public transportation options are plentiful for those living or working in the area. Penn Station is within walking distance, serving the New Jersey Transit, Amtrak, and the Long Island Rail Road. Furthermore, the Penn Station/Garment District also offers easy access to Grand Central Terminal and the Port Authority Bus Terminal at Eighth Avenue and 41st Street. The New York City subway also operates two major stations in the area, namely Herald Square on 34th Street Bryant Park/Fifth Avenue on 42nd Street, which are served by the A, C, E, 1, 2 and 3 lines.