Ever since the High Line elevated railroad opened in 1934, the warehouse complex known as The Terminal Stores, along with the surrounding neighborhood, went into decline. Through the years the 1.2 million square-foot brick building was used mostly as a self-storage facility plus the home of a nightclub called The Tunnel.
Today the area is undergoing a sea-change: not from the ground up; but let’s say from the sky down. The uniquely elevated High Line Park draws over 5 million people a year, and its popularity is contributing to the desirability of the neighborhood for new retail enterprises to sprout up.
“Everybody loves this neighborhood, and it’s just going to become more spectacular each year,” said Coleman P. Burke, the managing partner of Waterfront NY, which owns the Terminal Stores property together with investment firm GreenOak Real Estate.
The building is now immersed in a huge renovation project expected to take three years at a cost of $50 million. With some parts of the building dating back to 1891, and its location within the boundaries of the West Chelsea Historic District, many changes to the building will have to pass muster with the historic neighborhoods board for approval.
Whatever special complications are involved in the renovations seem to have had no relevance to those seeking out space within The Terminal Store’s premises. Uber, the crowd-sourcing taxi company, is taking over a 54,000 space there, while a large array of bars, restaurants and cafes are making plans to move in when the renovations are completed. At the moment rents are quite reasonable in the area, priced at about $50 per square foot. That compares favorably with nearby Chelsea proper whose rents float at about $59 per foot.
According to Alexander Chudnoff, a vice chairman of the New York branch of the commercial brokerage Jones Lang LaSalle, The Terminal Stores is hoping to attract a large percentage of high tech tenants, such as Uber, to transform the building into a kind of tech campus.
“They needed to be in a space that was hip, for lack of a better word,” Mr. Chudnoff said.
Mark Van Zandt of GreenOak, which has a 49 percent stake in the building, which GreenOak values at about $300 million, believes that more restaurants in the building will motivate more businesses to rent office space in The Terminal Stores.