Goodbye, WAMU! Hello, Walgreens! Pharmacies Fill Rx for Ailing Banks

Date Published: 
Aug 22, 2008

The apocalyptically minded once foretold a Manhattan lined with virtually nothing but banks. Chase banks. Citibanks. Astoria Federal Savings. That their dire predictions only came partially true (rather than entirely true) we can attribute, at least partly, to the credit crisis.

But it isn’t mom-and-pops that are swooping in to fill the vacuum.

“Drugstores are really taking spaces that formerly the banks were taking,” said Faith Hope Consolo, chairman of the retail leasing and sales division for Prudential Douglas Elliman. “There is an opportunity in the marketplace, so drugstores are taking a step forward.”

Last month, Steven Durels, executive VP and director of leasing for SL Green Realty Corp., told Crain’s New York Business that “all bank leasing has stopped.” Durels and other sources blamed the development on both the credit crisis and market saturation.

Whatever the root cause, one thing remains clear: Banks are no longer hogging every sizable storefront in New York City.

And that leaves room for you know who.

At 675 Sixth Avenue, for instance, the spot to be vacated by Barnes & Noble come May, Ms. Consolo has received offers from both CVS and Walgreens, but not one from a bank.

Nor has she received any recent offers from banks for the spaces she is marketing at Third Avenue and 62nd Street, Third Avenue and 66th Street, and Broadway near Columbus Circle. Yet, drugstores have expressed interest in all three.

“You have CVS, you have Walgreens,” she said. “Both of those are going head to head.”

Drugstore companies were not particularly forthcoming about their expansion plans, or lack thereof, though Walgreens spokeswoman Tiffani Bruce said that the firm is “certainly looking to build our presence and market share throughout the Northeast, and certainly New York and Manhattan are an important part of that expansion.”

According to Ms. Bruce, the fact that Walgreens is expanding its New York City presence—by fall, its Manhattan locations will grow from nine to 12—has nothing to do with the bank-branch contraction.

But there’s little question that the bank slowdown has, at the very least, made room for other retailers. “I think drugstores have always been in the market, but now they’re finding there’s some more availability,” said Gene Spiegelman, director of Cushman & Wakefield retail services. “Before, we had a generally more aggressive retail environment.”

Likewise, Cory Zelnik, of Zelnik and Company LLC, offered a more moderate prediction of drugstore growth in New York City.

“With the slowing down of bank branch expansion, it will clearly create more opportunities for the drugstores,” Mr. Zelnik said. “But I just don’t know that you will have this overwhelming drugstore proliferation because of this.”

“It will be more than a few new stores,” he continued. “But I don’t know that there will be this massive growth.”

Publisher: 
The New York Observer
Article Attachment: