Newmark Grubb Knight Frank’s Jeffrey Roseman on New York and Las Vegas
Daniel Geiger May 23, 2012, noon
Jeffrey Roseman is an executive vice president and principal of Newmark Grubb Knight Frank’s retail business and is a top retail leasing executive in the city. Mr. Roseman, who has handled a number of prominent leases over his long career, spoke to The Commercial Observer about how ICSC remains important for top-tier dealmakers, how retail isn’t going away despite the growth of e-commerce and what recent departures from Newmark means both to him and as part an industrywide shake-up in brokerage. As usual, Mr. Roseman will be heading into ICSC with several interesting space availabilities he is marketing.
The Commercial Observer: First things first—ICSC starts Saturday, what do you have planned?
Jeffrey Roseman: Oh, boy. I must have 50-plus meetings set up this year. It really feels like it’s going to be one of the busiest conferences in a while, it just does. Everyone I speak to is going. A few years ago, when the market was having some problems, I think a lot of the chains sent only the top-level decision-makers, because they didn’t need to send the local leasing folks. This year it seems like everyone is back to going again. And for some reason, New York City is the apple of everyone’s eye. It really is. So everyone is focused on New York and that’s why we have so many meetings set up. Our party, Newmark’s party, is Monday night. We have it every year, we own that night, and the RSVPs are through the roof. You’re going to have to sneak in.
We’ll have to sneak in? No press?
Don’t worry, I’ll help you.
Since ICSC is a national conference, do you expect to hear about national problems in the retail industry, like how the Internet is causing stores to shrink?
For every retailer that is shrinking, there are probably two that are forming and expanding. So while Circuit City is gone and Best Buy is having issues ,there are other electronics companies like HHG out of Indiana and they are gearing up or they seem to be. It’s not industry by industry, but for every retailer having problems others are flourishing, and that’s the nature of our business. You see it all the time. The retail graveyard is full of companies that have come and gone, that were dominant one day and then couldn’t keep up and got replaced.
But are stores physically shrinking? Are retailers just taking less square feet?
There are very specific industries, clearly in books and music and electronics. But I don’t see clothing. I just don’t. You may buy a few things online, that are spot-on that you know. You own a pair of shorts that you like and you know what they are and you know the size. But clothing is still a touch-and-feel type of thing, and shopping is still social. So for the most part I’m really not seeing it. You can’t buy a cup of coffee on the Internet. Look, I have been hearing this since the beginning of the Internet, I’m around that long (laughs). In Manhattan there are 50 million tourists. They’re not sitting in the hotel room clicking on the computer buying things. They’re walking into stores. We really are social beings and people just don’t want to sit at a computer all day.
Has the conference changed at all?
I think it always has been the most important conference. But it reaches a wider network of people now. There are more bankers and attorneys there now. Adjunct real estate folks, and you say, ‘What are they doing there?’ But the business is so global now. Companies are being bought and sold, going public, going private, raising cash, and there’s so many elements to success, so many disciplines—retail is as much a business play as a retail play, and the other activities that are part of it like banking and finance are there now. It’s not just storefronts anymore. It’s investment banking.
It must be great to be a broker from New York—from the way you describe it, Manhattan is the market where every tenant wants to be.
Think of all the markets that aren’t doing well. There are empty shopping centers in Detroit. For the most part, urban cities like L.A., Chicago and D.C., they’re doing well. But NYC is the top. It’s not bias, it’s just factual. There are stores here doing upwards of $2,000 a foot in sales and as high as $4,000 to $5,000 a foot. If you have a $2,000-foot store, you’re $4 million. The national average, if you go online and see it, is under $400 a foot typically.
Are you working with tenants right now or agency assignments primarily?
I’m really doing both. I’m doing a lot of landlord work. We represent a lot of properties, a couple of interesting things in Times Square, 1501 Broadway, for instance. We’re putting a very special restaurant space on the market there, which I will be bringing out to Las Vegas.
What is that space?
1501 is owned by a group called Paramount Holdings. Not Paramount Group; it’s a bunch of partners, they’ve owned it forever. The Hard Rock is there. We have a space on the side of the building that we’re marketing—it’s 18,000 square feet of prime space in the heart of Times Square. Main and Main. It’s probably about $4 million in rent we’re looking for. The space is on 43rd Street as opposed to Broadway. The rent would be $14 million if it was on Broadway.
Just a few steps away and a $10 million difference in rent?
In Times Square it’s gold anywhere you go, but Avenues are for the retailers and side streets tend to be for restaurants or entertainment who can’t quite afford the avenues. I think it’s $350 a foot on the ground and $150 on the second floor. We just brought it to market. ICSC is the perfect place to show it. We have another space on Madison and 41st we’re coming to market with, 292 Madison Avenue. It’s a repositioning of an office building that the owners are just recladding and the retail will be the beacon of the building. They really want to change the look of the building and you do that best with a retailer. It’s about 15,000 square feet on two levels. We have some serious interest.
You just did a deal nearby, with the retailer Orvis, on Fifth Avenue, right?
It’s now officially done. They’re going to anchor a space on the south side of 42nd on Fifth. There’s always been a cadre of souvenir shops and subway sandwichs there, but Orvis definitely will help the change the image. Fifth used to drop off at Saks, retailers didn’t want to go below that, but now you look and it’s a who’s who. You have Guess and Urban Outfitters. We had known Orvis’s lease was up in a few years and were able to impress upon them that a few years was tomorrow. They were astute enough to start now—getting a deal done is not for the faint of heart, it takes six to 12 months to get something done and many times retailers wait until the last minute and then they’re in a dilemma. That’s what separates retailers that are on point as opposed to the ones that tend to vanish. The guys that are out in the market, that understand it and are constantly upgrading stores and figuring out ways to become more relevant are the ones that stick around. It’s not an accident.
At 3 Columbus Circle, you’re rumored to be doing a big deal with Dick’s Sporting Goods.
Honestly I can’t comment other than to say that the building is spectacular and I hope to be able to talk about something soon. I am going to plead the Fifth.