The Downtown Retail Churn

Downtown Princeton retailers, with minor exceptions, have come back to life, leaving behind a recession that shook a few longtime businesses to their foundations.

“I think we saw a low about a year and a half ago, “ says Marco Cucchi, owner of Thomas Sweet Ice Cream and Chocolates.  “Things since have been recovering slowly, but steadily.”

Lahiere’s Restaurant, a Princeton landmark for more than 90 years, is shuttered, but Qdoba Grill (pronounced:  Cue’ doe-buh), a smart Mexican fast food concept, has just opened its doors to popular acclaim on Nassau Street.

“Times change, people change, they (Lahiere’s) didn’t and they’re gone,” says Gough “Winn” Thompson, Sales Associate in the Commercial Division of Gloria Nilson Realtors.

Local real estate professionals say the amateur might confuse all recent turnover in business with the down economic cycle.  But don’t, they say, because some of the change, or “creative destruction,” is inherent in the volatile retail sector, where boutique concepts come and go in consumer favor.

“It’s not just a function of the economy,” says David Newton, manager of Palmer Square Management.  “It also depends when leases come up.”

While it’s true that several businesses moved because their leases expired, it is likely that depressed sales figured largely in decisions to pursue cheaper rent or to get out of business altogether.

Newton now says retail business space on the Square is about 95 percent full.  “We’re fairly well leased,” he says.

If you could call what happened the past couple years a cyclical “shake-out,” those businesses that remain standing in the downtown corridor could be stronger than before.  Add new business concepts (e.g., greendesign, an eco-goods store, and Naked Pizza, an organic pizza parlor) to the old favorites and you have a lively mix of downtown retailers.

Certainly with campus and downtown office buildings disgorging people into the streets for food, shopping and personal services, Princeton Borough’s retail sector looks to be doing well so long as the economy keeps improving.  And the signs for that are promising.

Palmer Square Management (PSM) reports that of the 150,000 square feet of office space it owns, almost 98 percent is leased.  While PSM’s newly opened high-end Residences at Palmer Square are slow to find buyers, the luxury apartments are expected to lease more quickly once they become available in the fall.  And that could pour more shoppers into the pedestrian zone.

With some street level rents rivaling mid-town Manhattan, landlords are choosy about which retail concepts they like.

“Basically, you’re looking at 40 to 45 dollars a square foot for ground floor retail space,” says Winn Thompson, “with another 10 dollars on top for operating expenses.”

The recession sharpened the consumer’s eye for value at lunchtime, squeezing “white tablecloth” restaurants.  Popular with busy, but discriminating, budget-conscious diners is tray service quick-order food with flair.  Some of the newer entries to the downtown Princeton scene are national franchises, one from Colorado and another from Louisiana.

Says Thompson: “The successful landlords have a lot of options when it comes to food tenants, so they are going to gravitate to more chain-type stores rather than a guy who has $100,000 and a dream.  They are going to look for something that is successful over the long term and generally they figure a franchise operation is going to do that.”

Naked Pizza serves its first customers in September at 180 Nassau Street.  Thompson, who helped seal the deal, says it took almost a year from lease signing to door opening, a lengthy approval process that makes the Borough unique.  But he believes the restaurant will be distinct from anything in town.  “It’s basically a high-end organic pizza chain started in New Orleans and it’s been growing throughout the United States.”

Qdoba Grill has been open only a couple of weeks, but its burritos, salads and overall low-carb fare immediately generated buzz and has drawn a sizeable following from the University.  Just two days after opening, says manager Andrew Eck, “There was the case of a gentleman who said he posted it to his personal Facebook page; from there everybody from the athletic department was here within an hour.”

Businesses are still a little cautious.  But Princeton has become a regional hub, with a potent combination of economic diversity, wealth and a college student population of about 8,000 potential consumers across the street.

Says Mark Censits of the Princeton Merchants Association:  “Overall, Princeton is a good place to be.  It’s dynamic, it’s a very diverse economy here, it’s buoyed by Princeton University which has the carrying capacity to make it through much worse, much longer recessions than we had here.”

Downtown Princeton Retail from Princeton Community Television on Vimeo.

About the Author

Marc Mooney

Marc Mooney is a longtime television reporter, anchor and writer/producer.  He has worked for Tribune, USA Broadcasting, CNN, NBC and numerous local stations around the country.  More recently Marc has been doing business in China, helping U.S. and Chinese companies do business together.