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Shopping Centers Today -> November 1999
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Downtown Princeton: A study in prosperity
By Kevin Kenyon
Downtown
Princeton features a mix of well-known U.S. retailers and local
stores.
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These factors have helped Princeton's retail core to weather the storms of competition and recession better than most communities in New Jersey over the past two decades.
While towns like Ridgewood, Westfield and Red Bank suffered greatly during the late '80s/early '90s recession, as well as from intense competition from suburban malls built in their trade areas, Princeton's central business district never wavered, according to David S. Newton, vice president of locally based Palmer Square Management LLC, which owns and manages 49 mostly upscale retail shops comprising 110,000 square feet of space in Palmer Square at the heart of downtown.
"The one thing that makes Princeton different from those towns is that even though it's relatively small [1.73 square miles], it has its own, self-contained cultural base," he said.
The aforementioned towns, which also face competition from nearby New York City, didn't have the option of relying on one of the world's most prestigious universities, according to Newton.
The university itself attracts approximately 450,000 visitors annually, as well as 11,500 employees and 6,500 students, according to Pam Hersch, the school's director of community development.
"The downtown area is certainly dependent on the university," she said, noting that McCarter Theater alone, which holds numerous live performances, draws about 200,000 people each year.
The area is especially crowded during alumni-related events (17,000 people a year not including homecoming), she said.
The trade area as a whole has also progressed rapidly over the past 20 years, to the point where people now come from a wide geographical area to shop, according to Rich Brunelli, president of RJ Brunelli & Co., an Old Bridge, N.J., brokerage firm.
"What makes it unique is the fact that there's 400,000 people and only one regional mall [Quaker Bridge in Lawrenceville]," he said. "Usually when you have that many people you have two regional malls and sometimes three."
The downtown, which is dominated by Palmer Square, is the main draw for upscale shoppers, of which there is an abundance, he said.
Supporting the upscale element is a booming trade area that boasts an annual income of approximately $102,000 within a 5-mile radius, with an average age of 35, according to CACI Marketing Systems, Arlington, Va. Many are dual career couples in which one spouse works in Philadelphia, the other in New York. (Princeton is centrally located between the two cities.)
That's not to say, however, that Princeton's retail core has not faced its share of challenges.
In 1987, a developer invested $135 million to build an upscale project on the outskirts of town (College Road & U.S. Route 1) called Princeton Forrestal Village, with the idea that the center would become the new upscale shopping hub for the region. "They tried to persuade retailers that Nassau Street was going to become a ghost town and that they better leave the downtown area before it's too late," Newton remembers.
However, after having initial success leasing the center, even drawing several upscale retailers, Forrestal Village was 50% vacant within six months, according to Newton. The 335,000-square-foot center, which soon went into foreclosure, was eventually remerchandised into a factory direct outlet center, which it remains today. Besides Forrestal Village, the trade area consists of MarketFair; a 236,000-square-foot community center built in 1987; Quaker Bridge, a 1.2 million-square-foot regional center built in 1976; and Nassau Park, a 600,000-square-foot power center.
"We see our competition more as the likes of The Mall at Short Hills [more than an hour away], which talks to the fact nobody tried to develop an upscale mall near us, recognizing that we have that niche cornered," Newton said.
The Princeton area itself has undergone many changes over the years, he added, noting that in the early 1970s the downtown was populated mostly by local retailers.
At the center of Palmer Square is the historic 216-room Nassau Inn (also run by Palmer Square Management), which dates back to 1756.
The Square was originally built as a complement to the university in 1937 by Edgar Palmer, a 1903 graduate who was a wealthy real estate mogul and philanthropist.
Each portion of the Square has its own distinct architectural identity, especially Palmer Square West, the portion built in 1937, which still boasts one of its original tenants, the Silver Shop, which sells antiques and collectibles. Retail rents on the Square range from $45 to $60 per square foot, while sales average around $460 per square foot, with some retailers doing well over $1,000, according to Teri McIntire, director of marketing for Palmer Square and the Nassau Inn.
Because the Square is controlled by one developer, it is operated as if it were a mall, with a promotional fund used for marketing purposes, and another used for CAM.
The tenant mix features an intentionally equal amount of U.S. and local retailers, ranging from well-known players like Coach, Ann Taylor and Talbots, to one-of-a-kind boutiques like Zoe (apparel) and Matteo & Co. (home furnishings), which help give the Square a local flavor.
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