More than a decade ago, with just 30,000 people living south of Chambers Street and the neighborhood largely silent at night and on the weekends, high-end, luxury retail in lower Manhattan was at best a pipedream and at worst a failed enterprise.
Today, with some $20 billion being spent on new construction between the upper stretches of Battery Park City and Broadway, the residential community has doubled to 60,000 and continues to grow. That affluent community of residents, not to mention increased tourist traffic, has upped the demand for luxury retail.
Burberry, Hermès, Ferragamo, Michael Kors and Zegna are some of the luxury names to have signed on at Brookfield Place, while J. Lindeberg and Tory Burch head the list of names rumored to be in talks for space at Westfield’s World Trade Center retail corridor.
The outside general counsel for the National Urban League has denied a rumor that Macy’s was heading to a 400,000-square-foot site owned by the Empire State Development Corporation on 125th Street in Harlem.
NY1 was the first to report earlier this morning that the massive department store chain was expanding to the storied uptown boulevard. The plan angered some locals, who said that the store would displace independent businesses–many of them minority-owned–in the historically black neighborhood. That article is currently not available online.
The American Realty Capital New York Recovery REIT has agreed to acquire the 750,000-square-foot office tower at 1440 Broadway from Rockpoint Group and Monday Properties for $528.6 million.
“We are pleased to be acquiring 1440 Broadway,” said Michael Happel, chief investment officer of NYRR, in a prepared statement. “The Times Square South neighborhood, we believe, has significant long-term potential as the Times Square submarket pushes south and the Bryant Park submarket pushes north.”
Up and Coming
A massive chunk of retail space across the street from the Macy‘s flagship will be up for grabs in 2015, and the marketing is heating up.
Foot Locker currently occupies much of the retail portion at 112 West 34th Street in Herald Square. But when that least expires, landlord W&H Properties will have 90,000 square feet of retail real estate to fill.
Tarter Krinsky & Drogin LLP has signed an expansion at W&H Properties’ 1350 Broadway, the landlord announced last week. The law firm, which moved to the building in 2007, increased its presence by 35 percent and will now occupy a total of 37,609 square feet across three floors.
“Tarter Krinsky & Drogin has been a tenant at 1350 Broadway during a period in which we have transformed the property in a $53-million, top-to-bottom upgrade program,” said Anthony Malkin, president of Malkin Holdings, which oversees the W&H portfolio, in a prepared statement. “This expansion demonstrates that we’ve delivered on our promises and ensured the highest levels of tenant satisfaction.”
Stat of the Week
In honor of this week’s Power 100 rankings of real estate professionals, I figured I would create the first annual Power 5 rankings of the top submarkets by year-to-date leasing activity. To make things even across all 17 submarkets, they are based on leases signed and renewed as a percentage of the submarket’s total inventory. So without further ado, here are the Power 5.
With a number of projects in the pipeline, Bruce Eichner is planning a dramatic comeback to New York real estate with an 80/20 residential project at the Harlem Park site he agreed to acquire last week.
Mr. Eichner is in the midst of an architectural competition for the planned development at 1800 Park Avenue and 125th Street, The Commercial Observer has learned.
“He is going to do something creative with the building,” Geoffrey Newman, senior managing director at Newmark Grubb Knight Frank, said of the project. “For a rental perspective, I think it’s going to be a spectacular building.”
Times of change and uncertainty are always worrisome for investors—fear takes hold, spending is called into question and valuations become unpredictable.
Mix an election season with the impending threat of a potentially devastating fiscal cliff, then throw in a destructive, rogue tropical storm named Sandy, and you’ve created an environment that is not conducive to a stellar business quarter for the commercial market.
However, thanks to tax law-motivated sales and retail—as well as a handful of big end-of-year leasing deals—the fourth quarter ended on a relatively positive note, despite a slowdown in leasing activity.
Monday Properties announced the 31,700-square-feet expansion of Macy’s, Inc. at 1440 Broadway, the building Monday Properties owns and operates on the southern fringe of Times Square at 40th Street.
It was the storied 150-year old retailer’s third expansion in two years at the 25-floor office building, and gave it full occupancy of the 10th floor, which Advance Magazine Publishers had subleased to Skadden Arps since 2006. CBRE Vice Chairmen Scott Gottlieb and Michael Laginestra represented the tenant, while Monday Properties Director Jordan Berger represented the owner.
When the owners of 197 East Broadway, on the Lower East Side, came to terms with the fact that their building was in desperate need of a renovation after 124 years as their headquarters, they made a move that might look obvious for any holder of a valuable commercial real estate asset. They looked for a loan. On paper, though, the Educational Alliance—a non-profit serving about 50,000 New Yorkers with a range of services, from pre-school, health and wellness for seniors to addiction recovery programs—is not your average Goldman Sachs client.
Nonetheless, in August 2012, Goldman Sachs’ Urban Investment Group committed $44.1 million of capital to finance the redevelopment of the Educational Alliance’s building. The financing comes in part as a New Markets Tax Credit transaction, and in part as a senior loan directly to the nonprofit.
Construction starts in New York City were down 16 percent in the first half of 2012, the New York Building Congress announced this morning.
A total of $6.6 billion-worth of new construction projects launched in New York City during the first 6 months of this year, down from the $7.9 billion achieved in the first part of 2011 and down $4 billion from the first half of 2010.
MetLife has refinanced a portion of the Shopping at Bay Plaza in the Bronx, where the largest retail complex in the city is located. Prestige Properties, the owner of the 1.3 million square feet of retail, residential and office spaces is currently in the process to expand the area up to about 2 million square feet by 2014.
RECon: Las Vegas
Macy’s has begun an ambitious $400-million renovation of its landmark store on 34th Street, work that highlights the department store’s resurgence in recent months.
EMC Corporation is expanding by about 37,000 square feet at 2 Penn Plaza, where it bases the bulk of its Manhattan operations.
The firm is a Fortune 500 company that specializes in information technology and cloud computing services and is growing according to people familiar with its space needs.
It’s the great white whale of Manhattan retail.
Aside from Walmart, Nordstrom is the store every retail broker in the city dreams of harpooning and reeling into a new home. One prominent broker familiar with the store, the amount of space it needs and the rents it would probably be willing to pay estimates that the commission for handling its lease would be around $10 million.
But like a leviathan lurking beneath the waves, the department store has offered only fleeting glimpses around the city, most notably at several development sites and a few existing assets with the capacity to accommodate its sprawling footprint.
The scuttlebutt nowadays: Nordstrom is contemplating one of two leases, one at the West Side rail yards with the Related Companies or another at the base of Extell Development’s soaring new residential tower now rising at 157 West 57th Street.