CBRE’s Susan Kurland on American Girl’s Expansion and KidZania’s Invasion

or a broker who counts top-luxury retailers like Jimmy Choo and REI among her eclectic cache of clients, Susan Kurland, an executive vice president for CBRE’s Retail Brokerage Services, hardly considers representing Mattel’s American Girl brand as child’s play. Her work with the highly popular line of 18-inch dolls has garnered her accolades like REBNY’s Most Creative Deal of the Year Award in 2002 for American Girl’s 45,200-square-foot space at 609 Fifth Avenue. Fresh off of working on a deal that brought fashionably square retailer J.C. Penney to the office and retail portions of 200 Lafayette Street (a building owned by Jared Kushner, the owner of The Commercial Observer), Ms. Kurland spoke about her work with American Girl and the imminent arrival of KidZania, an international chain of family entertainment centers.

kurland a web CBREs Susan Kurland on American Girls Expansion and KidZanias Invasion

Susan Kurland.

The Commercial Observer: From what we’ve heard, J.C. Penney may be putting in either itself or one of its brands in the retail portion of 200 Lafayette? Do you know what their plans are going to be?
Susan Kurland: I think it’s going to be rotating formats, but the truth of the matter is I don’t think they have actually totally determined what it’s going to be.

This would be J.C. Penney’s first Downtown store, right?
Yes, but it’s not a J.C. Penney store. I believe—and I don’t know for sure—that they’re going to rotate and try out different concepts.

That aside, do you think the Soho retail market will change?
What’s really going on in the market, there hasn’t been that much of a shift other than the landscape moving farther south and east, and that sort of really happened with me (laughs). I put REI on the corner of Lafayette and Houston. I felt that they were a destination tenant, which they are, and it wasn’t necessary for them to pay the full bore of Broadway, because just as many people will see them and come to them in the Puck Building.

Then, when you look at sort of like a J.C. Penney, if you think that they are, they are going to have some form of retail in the base. Again, that’s two blocks off of Broadway. It’s really the corner of Broome of Lafayette, so that’s south and east once again.

But when you look at the more luxury types of tenants, generally they’re further west. Some of the more popular streets are Spring, Prince, Greene and some little pockets of Wooster streets, while Broadway continues to retain sort of the bigger-box, national chain-type tenants.

Are big-box retailers starting to look at buildings similar to The Puck Building for possible Downtown outposts?
You need to be a destination-oriented tenant to be successful at making a move like that. If you look back many, many years ago, it’s sort of like when Crate & Barrel didn’t go to Soho, but they went to the southern-most corner before you cross Houston Street, as did Adidas. That would probably be an example of sort of putting your flag in the ground a little bit early. Because if you go north on Broadway, there’s not a lot of stuff that goes on there. It has not merged and become really an overly important retail area, until you get up again much farther north to like 12th Street or in that part of the world.

As you have been active in the Meatpacking District in the past, what changes have you seen happening there?

I just leased 180,000 [square] feet in the last two years, so I can tell you everything about the Meatpacking District. Here’s what’s changed: what’s changed really is 14th Street, because people originally looked at the Meatpacking District and 14th Street was the street. You had Jeffries and, just like you’re saying, Stella McCartney—all those types of people. What’s happened, and what’s changing today, is the fashion tenants, and if you really walk around the area, you will find that the fashion tenants are more on Washington, Gansevoort, Little West 12th.

What you’re finding now on 14th Street are, like, we just did the Uggs deal, we had Levis—14th Street is more what you’d expect: your traditional regular retailers. That’s why those other tenants are moving away. But you have a lot of fashion tenants and people say, ‘wow, do they do business?’ There are some stores there, and I am not going to name them, because I don’t want this in print, but that’s some of their highest-growing stores in the chain. People don’t understand the Meatpacking district. It must be [American Express] Black Cards; people just come and put it in the back of the limo and go.

You have so many more things that are important, particularly the Whitney Museum, which again is a huge draw. If you spend a Saturday afternoon there and you mill around and go eat in restaurants, there’s a lot of international speak. It’s very international, like Soho is. Once that happened, the trends start—it’s going to keep going, because I believe you are in the beginning of a lot of development. There are a number of very important development sites in the Meatpacking district today.

What are some of the recent deals you’ve worked on nationally?
Well, I do American Girl all over the place. We just closed a deal in Florida, we just closed a deal [in] Ohio.
I just do these constant [deals] all over the country. I have two more leases out with them now. But I’ve done them like I did here. The store in New York is 50-some-odd-thousand [square] feet, the store on North Michigan Avenue [in Chicago] 50-some-odd-thousand [square] feet. The deal at The Grove was 40-some-odd-thousand [square] feet. After that, there were deals like one in Boston that was 25,000 feet, and now they tend not to be much bigger than 15,000 [square] feet. But I’ve done, I don’t know, since I’ve been here, probably 15 of them.

Do you think New York City is a good test market for national or international chains before they venture farther out into other cities?
I don’t think from a psychological perspective they look at New York as a test market, because it’s also the most expensive market. I think a lot of concepts are actually tested in Chicago. I think everybody wants to be in New York, because it’s the greatest branding opportunity you have any place in the world. And so what’s so interesting is like, for American Girl, you would be shocked by the number of calls I get internationally to see if they’ll come there. And I’ll sit there scratching my head. ‘It’s called American Girl!’ (laughs). I have people from other parts of the world call to see if they could get a franchise to it. And that happened really from the New York store, maybe Chicago, too, because it is a little bit international.
There are other concepts that we are representing on a larger basis, like KidZania. That’s like 75,000-[square]-foot stores … and I’ve sort of touched the market a little bit and now I am told that by mid-end of summer, we’re going to start to really go to the market in a very serious way.

Where are you looking?
Our first markets are going to be New York, Chicago and L.A., and go from there.
With KidZania, one of the opportunities we have is one—and it’s a good property—[that has] two movie theaters. Well, neither one of them was really state-of-the-art, you know, 20 screens or whatever, so what they’re doing with us is they’re looking at expanding the other movie theater box to incorporate our needs for that. So I think you’re going to have big changes of use in some of those big boxes. But I think when you look at all the inline-retailer, the smaller shops, I think the important properties are doing very well now, actually.
I continually, on a daily basis, get calls for KidZania, which you probably don’t know a lot about, because it’s not in this country yet. The retail concept is probably one of the most brilliant I’ve seen any place, and it’s huge. The small format is 75,000 [square] feet. The large format is 150,000 [square] feet.
Everybody now wants that concept to anchor their projects, so it’s interesting.

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