http://www.nytimes.com/2010/09/15/reales...dxnnlx=1284552034-AH8KfXYckFq4BW924PkeQQ
The Auto Show Along 11th Avenue Is Expanding
By JOTHAM SEDERSTROM
September 14, 2010
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On 11th Avenue in Manhattan is a stretch of auto dealerships similar to other car malls across the country, with glass-fronted showrooms displaying the latest and greatest models from Detroit, Germany and Japan.
But unlike other automobile rows in places like Boston and Minnesota, where dealerships have closed over the last few years, the stretch from roughly 48th to 58th Street on the far West Side, called Autobahn Alley, is thriving.
In what real estate brokers and auto industry executives are calling the biggest burst of activity in more than a decade, several auto brands are expanding or relocating along the corridor, with a planned Mercedes-Benz flagship on 54th Street the most recent example.
“As far as development goes, this is easily the most activity we’ve seen there in years,” said Mark Schienberg, president of the Greater New York Automobile Dealers Association, a trade group that represents about 425 dealerships in nine counties across New York State. “There’s been just an extraordinary amount of activity that’s been going on over there.”
Mercedes announced its five-story showroom and service center earlier this year, and a $125 million deal last year will place Volkswagen and Audi in new facilities near 55th Street.
Infiniti of Manhattan is seeking a new location on 11th Avenue to replace a showroom at 608 West 57th Street that it will need to vacate to make way for a residential project, real estate brokers said. Chrysler, meanwhile, has also been discussing expansion plans, the brokers said.
None of those transactions, however, match the size and scope of the new Mercedes-Benz dealership, said Michael Laginestra, a vice chairman of CB Richard Ellis who, with his colleague Michael Geoghegan, signed the deal last year as part of a residential development project.
The 333,000-square-foot dealership, already under way at 770 11th Avenue and scheduled to open early next year, will have glass on three sides, a waiting room with Wi-Fi, a coffee and pastry bar, and a garage with 72 work bays, said Alan McLaren, president of Mercedes-Benz of Manhattan.
The dealership, the only one in the country directly owned by Mercedes-Benz rather than a franchisee, will take the place of a showroom at 536 West 41st Street that has long suffered from its traffic-choked proximity to the Lincoln Tunnel, Mr. McLaren said.
“New York is one of our most critical markets in the country,” said Mr. McLaren, who added that the search for new space began about six years ago. “The dealership is consistently one of our top five dealerships in the country, and if ever there’s a place where you need to get it right, it’s right here, where the performance standards are arguably set higher than anywhere else in the United States.”
The surge of activity on 11th Avenue is in sharp contrast to other areas of the country, where approximately 1,900 dealerships have closed since 2009, said Paul Taylor, the chief economist at the National Automobile Dealers Association in Virginia. Mr. Schienberg of the regional dealers association said that in New York’s five boroughs, only 15 dealerships had shuttered in the last 10 years.
The stability in New York, Mr. Taylor said, can be attributed in part to 11th Avenue’s proximity to Wall Street and the financial markets, as well as the sheer number of drivers in the city. While dealerships in other areas of the country are suffering from a slump in auto sales and a move toward consolidating multiple brands under a single roof, both luxury brands and mainstream ones like Toyota and Ford are thriving on 11th Avenue.
“The trend toward dealerships opening in Manhattan is driven in part by its province in the financial markets worldwide,” said Mr. Taylor. “Luxury brands are typically sold to households with significant incomes and large holdings of security outside of retirement programs. And, of course, many of those households have jobs in Manhattan.”
New York’s thirst for luxury brands played a role in the Volkswagen Group of America’s decision last year to sign a deal to buy a building that was previously owned by Potamkin General Motors at 798 11th Avenue, giving it 265,000 square feet of showrooms. When it is completed later this year, the space will house not only Volkswagen but also its luxury sister brand, Audi.
Jedd Nero, an executive vice president at CB Richard Ellis who completed the transaction last year after a two-year search by Volkswagen, said that regardless of the faltering economy it was crucial for Volkswagen to establish ties to the 11th Avenue automobile corridor.
“Here was a rare opportunity for Volkswagen to purchase this building and make it their own,” Mr. Nero said. And because the company is not tied to a lease, he said, executives “know that it’s their choice down the road as to how long they want to be in the market.”
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great news, such a cool project for NY.
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